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In a time of global financial turmoil when countries such as the United States are facing some of the biggest financial crises since the Great Depression of the 1930s, the significance of personal finance literacy has never been greater.
In a study released by Milken Institute this year, just around 57 percent of the U.S. adult population is financially literate. While most parents acknowledge that they are responsible for providing their children with knowledge about personal finance, 31 percent admitted that they have never really discussed it with them.
Currently, there are only 24 states in the country that stipulate high school students take a stand-alone personal finance course to graduate. According to advocates of financial literacy, this number is too low. Research points to the fact that having a basic knowledge of personal finance will help Americans make smarter decisions with the money they earn. This is why there needs to be more awareness about personal finance through the school system as well as in homes.
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Personal Finance Classes for Adults
As an adult, having financial literacy is an integral component of improving one’s quality of life. What follows are some pointers as to why personal finance classes for adults are crucial.
A 2019 study revealed that the total credit card debt that Americans owe amounts to more than $800 billion, and that adults between the ages of 18–29 have credit card dues which run for more than 90 days. In 2022, that debt has reach $925 billion, according to LendingTree.
It was also revealed that, in 2020, around 28 percent of adults reported a scenario where if they lost their primary source of income, they just had enough money to support themselves for a week. Only 15 percent of the respondents believed they had enough savings to last for three to six months.
Again, in 2019, when asked what part of their financial finances worried them the most, 17 percent of adults said they were concerned about not having adequate retirement funds.
In terms of managing one’s personal finance, there are some basic skills that an individual needs to develop. They must know how to prepare a monthly budget. They need to learn how to save some money every month, and keep it aside to build a long-term savings fund. They must practice paying bills on time instead of delaying them and paying unnecessary fines. They also need to keep track of their credit score. Personal finance classes for adults can help one develop and master these skills.
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Is Learning Personal Finance Easy?
Learning personal finance and practicing financial discipline may not necessarily be easy for everyone. Like any subject taught at school, some students pick it up faster than others. However, having a comprehensive understanding on how to plan ahead and achieve your financial goals will have a profound effect on your life.
So what is personal finance? Basically, personal finance entails the optimal management of money and other entities that are financially valuable, such as property. It includes being aware of your daily expenditure and how that affects your personal wealth, proper usage of credit cards, understanding interest, and how to make it work to your advantage. It is about planning for your family’s future needs in different scenarios.
Personal finance is also about understanding different financial products, such as insurance, loans, various kinds of bank accounts, and stocks, and how you can make them part of an asset portfolio to build your personal wealth. More than just saving money, personal finance is about having a rooted logical understanding of market conditions, what affects it, and where and when to invest money in different case scenarios, so that your financial situation stays strong in the most challenging life and broader economic situations.
So, basically, even though it may not be easy for everybody to learn, having a reasonable understanding of personal finance is crucial for your and your family’s well-being.
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What Do You Learn in a Personal Finance Course?
In a typical personal finance course, you will learn the following concepts:
Basic fundamentals
These include budgeting, significance of credit score, cash flow, how to set financial goals, and various taxes.
Saving
This concerns how to set goals for saving in various situations and contingencies, such as acquiring a home, investments, college for your kids, critical emergencies, etc. You will learn the significance of compounding interest, and how to set targets for your retirement fund and to be aware of the specific amount to be kept aside at each stage of your financial life. You will learn how to set these goals by taking into account your personal interests, spending habits, and the quality of life that you intend to maintain.
Debt management
This is a crucial segment of personal finance. Here, you are expected to gain an understanding of assessing your current financial situation, determining how much debt would be necessary to achieve your objectives, and finding the optimal way to repay debt efficiently. You will be made aware of various debt products, such as loans, credit cards, and mortgages, and how best to leverage them.
Investment
This segment is about how to achieve financial growth through investing. You will understand the various investment tools, how to take calculated risks, and build a diverse financial portfolio which is optimized for maximum returns and minimal risks. Furthermore, you will come to understand the different dimensions of investing, such as passive and active investments, along with the charges and taxes associated with them.
Risk management
This segment entails protecting your financial goals from expected and unexpected events. You will understand various insurance products and how they can be worked into your financial plan in the long term. It is crucial to protect your financial planning through these products, so a comprehensive understanding is imperative.
Personal Finance Course Free Options
There is an abundance of free personal finance courses online. Most of the courses can provide you with at least the fundamentals to get you started on the road to achieving your financial goals.
- Personal Finance 101—This foundation course from the educational platform Udemy is a great place to begin. The three-hour course consists of animated videos through which you can learn about the fundamentals of personal finance through topics ranging from optimal credit card utilization, saving for college tuition, to planning for your retirement. Although you will need to pay for a certificate of completion for the course, the actual content can be accessed for free.
- Introduction to Managing Your Personal Finance Debts—Available on Alison, this course is a great starter course for individuals who wish to understand how to pay off debt in a practical and efficient manner. It also shows you how to organize your various debts from credit cards and loans with the help of spreadsheets, and teaches you how interest rates can be negotiated with institutions that provide loans and credit cards. The three-hour course is free, and you can get certified as an Alison graduate if you achieve more than 80 percent on an assessment.
- Create a Budget with Google Sheets—This personal finance course from Coursera, another reputed digital educational provider, teaches you the amazing possibilities of Google Sheets when it comes to planning your budget. The one-hour course is effective at helping you gain clarity with regard to setting and implementing your financial goals through an organized layout.
Free Personal Finance Course for High School Students
Instilling the fundamentals of financial planning in young minds is crucial in these turbulent times. Here are some free online courses designed for young adults that are engaging and effective at helping high school students understand the concepts of personal finance.
Financial Planning for Young Adults
This course from Coursera has been designed by the University of Illinois in collaboration with the Certified Financial Planner (CFP) Board. The course, through videos and quizzes, introduces the basic concepts of financial planning to young adults. Composed of eight modules spread across four weeks, students are taught about setting financial goals, creating budgets, credit management, investment tools, savings, and risk management. The last module explores the possibilities of having a career as a financial planner and includes real-time video interactions with CFP professionals.
Saving and Budgeting
This free course is presented by Khan Academy, another popular educational platform. Over the course of the program, students will be directed on how to identify their basic and long-term financial goals. Following this, they will be required to answer questions so that they can identify their priorities with clarity. The students are then required to design a budget using fundamental strategies for financial management.
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Naveen Athrappully is a news reporter covering business and world events at The Epoch Times.
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