Colleges making financial literacy part of education
Young people facing debt from student loans and credit cards are finding ways to learn about handling personal finances
March 1, 2015 12:00 AM
Sean McGreevey, left, assistant dean for career development at Chatham University, teaches a class called "Financial Wellness." The class included, from left, senior Eir Rovira, graduate student Nick Bender and senior Nicole Werwie.
Sean McGreevey, assistant dean for career development at Chatham University, teaches a financial wellness class.
By Mahita Gajanan / Pittsburgh Post-Gazette
For years, Nick Bender struggled with anxiety and panic attacks related to his student loans. Pursuing an education landed him $150,000 in debt.
But now, after paying down his loans for a few years and researching financial literacy, Mr. Bender has a different outlook: Picturing a life without debt helps him realize he will get there.
The 27-year-old is typical of many of the millennial generation who have piled up debt, and of an increasing number who are tackling the situation by educating themselves.
A graduate student in Chatham University’s food studies program, Mr. Bender is one of 11 students who take Financial Wellness, a weekly course started in August. Sean McGreevey, assistant dean for career development, teaches the course.
College seniors, especially, fear not having future plans, said Mr. McGreevey. The class teaches students how to manage their financial life after college, and covers the importance of savings accounts, budgeting and living debt free. Graduates can find themselves in deep credit card and educational debt. Many return to hometowns, delay marriage and don’t invest in large assets such as cars or houses.
Part of becoming financially literate is learning to talk about money. Mr. McGreevey’s class fosters a sense of community so the students feel comfortable in sharing their financial realities. “It makes you more aware,” said Nicole Werwie, a senior. “You talk about spending and realize how hard it is.”
It is hard. Adults between the ages of 22 and 33 are saddled with debt, according to the 2014 Wells Fargo Millennial study, which revealed 40 percent of millennials have to pay off loans associated with credit cards, education or mortgages. Only slightly more than half of millennials surveyed for the study said they had started saving for retirement, and reported that 50 percent of their monthly income goes toward paying loans, according to the study.
Mr. McGreevey said he works to dispel myths common among young people who see debt as inevitable.
“There’s this sentiment that you need a credit card, and need to use it wisely to build good credit,” Mr. McGreevey said. But going without a credit card forces students to live within their means.
“What if you bought a car that’s reasonable based on your life?” he asked. “One that you could afford?”
He tells his students that budgets are freeing. Allocating money to specific parts of your life makes it easier to decide where to spend any remaining. He makes a budget with his wife before every paycheck and has embraced the idea of shedding unneeded material things. Last summer he sold two kayaks.
“Of course, it’s pretty ridiculous I had a couple extra kayaks I could sell,” he said, laughing. He teaches kayaking and it’s a passion. But he didn’t need the extra boats.
Erin Smith, a senior in the class, said she is good at saving money right now, but worries about debt as she pursues graduate studies in higher education and student affairs at the University of South Carolina.
“It’s about you and shaping your behaviors,” said Ms. Smith.
Of course, people have their vices. Mr. Bender said he overspends on fine wines and gourmet foods, justifying his purchases because he works in the food industry.
But wine is his passion, and financial discipline isn’t about eliminating the pleasures of life, said Mr. Bender. Students like him can find half-off prices at restaurants, student discounts at movie theaters and access to free or discounted public transportation to reduce the cost of entertainment and dining.
It’s possible to limit spending and still enjoy life by hosting group activities or cooking meals at home, said Chelsea Fagan, a Brooklyn-based writer and creator of the blog The Financial Diet.
The website, which she started last summer as a way to publicly chronicle her own spending, provides advice on everything from grocery shopping to the cost of dog ownership.
Airing financial realities still feels taboo to Ms. Fagan. To quell that feeling, she posts submissions from anonymous readers that range from accounts by people who have dug themselves out of debt to people who have ignored their bills altogether.
Ms. Fagan said it is important that students, even at the high school level, know what credit scores mean and how to open checking and savings accounts.
Pennsylvania is not one of the 19 states that require schools to offer courses in personal finance, according to the Council for Economic Education’s 2014 Survey of Schools. But educators are recognizing the need for such courses, said Dena Huselton, a business and social studies teacher at Riverview High School in Oakmont. Riverview made its personal finance course a requirement for incoming freshman last year.
Patsy Kvortek, who has taught the course for seven years, said students participate in many hands-on projects. Recently, her students made a budget for one of three things: a future wedding, a graduation party or a senior trip.
“What an eye-opener,” said Mrs. Kvortek, who provided monetary limits for each choice. “They couldn’t believe how much food cost.”
Ms. Huselton takes time at the end of each semester of her economics classes to talk to seniors about the realities of life after high school. That gets more attention than lectures on supply and demand because students know the future is near, she said.
“They want cars, they want apartments and they don’t even know what co-signing means,” she said.
Mahita Gajanan: email@example.com or 412-263-1964.
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