According to the American Psychological Association’s 2014 Stress in America™ Survey, seventy-two percent of American adults feel stressed about money. In light of this sobering statistic, The Babson Center for Global Commerce offers personal finance sessions to students each year, helping them manage their current financial situation, learn to budget for their first job after graduation, and plan for their financial future. Operations Manager Janna McClain, C’04, and David Losson, C’18 facilitated three consecutive Sunday evening meetings, each lasting about an hour and a half. This semester, twelve students met together in the Babson Center Conference Room, where they shared a meal and guided conversation about how to make sound financial decisions.
In session one, “Know Before you Owe,” students learned basic principles of debt management and compared and contrasted the different types of debt undergraduates commonly take on, ranging from subsidized government loans to credit cards. Students also examined their own personal spending habits, established one SMART (specific, measurable, attainable, realistic, and time-constrained) goal, and made an appointment in their electronic calendars to revisit their progress toward that goal.
In session two, “Graduation, Job, Then What?” students learned about the difference between gross and net income, the types of benefits an employer might offer, the importance of negotiating salary, and guidelines on how to establish an initial budget.
In session three, “Pay Yourself First,” students learned about different types of savings accounts, including how liquidity, risk, and potential earnings are key factors that demonstrate which accounts are most appropriate for different financial goals. Participants discussed how to make complicated decisions about whether to pay off debt, contribute to an emergency fund, or save for retirement.
Each session included hypothetical cases where the students applied their learning to develop personalized strategies for each topic.
Participant Leiding Taylor, C’17 shared, “This information is really helpful. I think it is the kind of learning that should be taught more often in high schools and colleges across America. Personal finance should no longer be a taboo topic. Educators and students need to be able to speak freely on this subject in order for generational changes and improvements to be made. As of right now, there’s nothing stopping us from making the same financial mistakes that our parents’ made along the way.” Hopefully the Sewanee students who participated in personal finance seminars, now armed with basic concepts and principles to manage their finances, can approach their financial future with confidence rather than stress.