SDSU offers new financial literacy class next fall
April 27, 2016
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The minute high school is over, the umbilical cords attaching students to their parents are cut, and they’re left to fend for themselves in the real world. All of a sudden, foreign concepts like decisions of buying or renting a home, buying or leasing a car, insurance and taxes are thrust at them.
Unfortunately in America, individuals are not fully equipped in financial literacy. Fortunately for San Diego State students, a financial literacy class will be offered in the fall semester as a general education foundations class under social and behavioral sciences. Finance professor Tom Warschauer will be teaching the course.
California is one of about a third of states in the U.S. without a financial literacy class requirement in high school, but because these concepts seem hard to grasp firsthand for high school students, the class is more suited to college students.
The class covers a range of practical concepts about decisions students will have to make in the next three or four years.
Warschaur will teach students the tips and tricks on how to not be tricked by businesses and their agents.
“My viewpoint in this class is not that businesses are good or bad, it’s not that they’re trying to take advantage of you or not,” Warschauer said.
“It’s just that they have their set of interests and you have your set of interests, and they don’t always merge.”
Warschauer will arm students with enough knowledge to tell when advice from a company or business is really in their best interest or not.
For him, it’s a “consumer protection class.”
When Americans are forced to choose a retirement plan or disability insurance when they get their first job in their field, they end up making bad decisions due to financial illiteracy.
When it comes to disability insurance, people don’t want to think about being disabled, so they ignore the possibility until the worst happens. At this point, people are stuck with short-term insurance, and they don’t have the financial resources to respond to the situation.
The financial literacy class will teach students how to avoid such a scenario.
“You need to be aware of what the choices are, and that’s what the heart of the class is,” Warschauer said.
The class will teach students how to use smartphone applications to help keep track of spending.
It gives guidelines on a range of topics such as borrowing, interest rates, car leases and car loans
It will mostly teach students about where to look for information and the best information sources.
Warschauer knows students can’t absorb a lot of information right away, so he hopes to equip his students with the ability to find information when they need it.
The class will have multiple project requirements.
One project will involve students envisioning themselves in seven years and decide what kind of job they might have.
Using income data from the government, they will build a budget and calculate taxes around those earnings.
The project also requires the student to build a budget and savings plan around the possibility of marriage and children.
Warschauer said he hopes to keep everyone who will take the class from making poor, irreversible financial decisions.
“The cost-benefit relationship of this class is really high,” Warschauer said. “If I can keep half the class from making a really bad financial decision and messing up their life, then I’ve really accomplished something important.”
Finance assistant professor Ning Tang also hopes this class will change the culture of not talking about financial decisions in homes.
“It’s about changing the culture because people don’t talk about finances,” Tang said.
“When you learn about this, you can go to your parents and ask them about financial management.”
Warschauer believes the class should be a requirement not just for all SDSU students, but also for all human beings.
“Financial literacy is a survival guide,” Warschauer said.
Warshauer built the nation’s first bachelors’ and masters’ degree programs in personal financial planning. Warshauer is also the founder of the finanical planning program within the College of Business Adminstration.In 2011, the college was nationally recognized by Financial Planning magazine as one of the top 10 best financial planning schools in the U.S.