It doesn’t take a business major — or even a major in anything at all for that matter — to take a personal finance class. And doing so could provide benefits that reach far beyond the price of the class or even the price of a college education.
To some, much of the information learned regarding personal finance might seem common sense, but such information must first be learned to seem “common”. I found that when moving forward into life after college, much of what I learned in my personal finance coursework came in handy in any number of ways.
Buying a home and finding a mortgage
Buying a home has been the biggest financial undertakings of my life thus far. Knowing what I was getting into and how much it would cost me over time really opened my eyes to the full financial responsibilities of home ownership even before I was officially a homeowner.
Understanding how interest rates can affect the amount we pay on a home over time, how loans are amortized (the breakdown of payments between interest and principal), how refinancing could affect a loan, how different payoff times can affect the overall amount we pay on a loan, and similar aspects have helped save our family tens of thousands of dollars on the costs of home ownership over time.
Whether it’s credit cards, student loans, a home mortgage, or whatever, understanding debt and debt payoff can be a crucial aspect of personal finances moving forward from the college environment. Understanding things like how changes in interest rates — even small ones — over time, can equate to thousands of extra dollars in costs, how paying down debt can cut costs over time, and how certain forms of debt payment options or plans are determined were all be covered in my personal finance related coursework.
I’ve used this knowledge not only to pay off our mortgage so that we own our home outright, but to remain debt free when it comes to credit card debt, vehicle loans, and other potential liabilities.
Creating a personal or business budget
Budgeting can be a crucial part of after-college life. Whether it’s in our work or our personal lives, having the ability to create and understand a budget has been critical to our personal financial success.
Personal finance coursework helped me learn not only how to create a budget that fits our work and personal life, but how to maintain that budget as well. For many, the hardest part of budgeting isn’t making the actual budget but the keeping of that budget and finding ways to make it useful and meaningful to their personal finances. With the education that comes with coursework in personal finance though, I’ve been provided with the knowledge, skills, and understanding that allow me to mold our budget to our personal needs and specifications.
Understanding Asset Diversification and Investing
While personal finance coursework might not delve too deeply into assets and investing, it can at least take a general look at the categories. Reviewing things like general investment tools like certificates of deposits, savings and checking accounts, bonds, stocks, and retirement accounts provided me with an overview of the more common forms of investing. Such coursework may also review various forms of assets and liabilities that many people encounter in their financial lives and determine how to compare these two financial columns to determine and overall net worth.
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The author is not a licensed financial professional or academic advisor. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.