By Katie Main
Students work countless hours to gain enough knowledge to earn a degree of their choosing. However, most students are graduating without the fundamental knowledge needed to make basic financial decisions.
In addition to working toward a master’s degree in Mass Communications, Ashley Ryan is in the process of planning a wedding and purchasing a home.
“Being engaged is a whirlwind! At first you get swept away by the excitement and then reality sets in that you will soon be financially on your own,” Ryan said. “Bye-bye parental help.”
Ryan said she was lucky to have parents who tried their best to let her learn from their financial mistakes. She said they explained to her the basics of taxes and credit, but most of her financial knowledge has come from experience along the way.
The experience of purchasing her first house has been filled with many crash-courses into the world of home buying, much of which is new to her, Ryan said.
Ryan said if she has learned anything, it is to keep financial documents organized and accessible when purchasing a home, otherwise it will create headaches for all involved.
“Apparently you have to sign your life and soul away to buy a home,” Ryan said. “Who knew?”
Ryan said she does not think most students graduate with the fundamental knowledge they need to be financially successful. She said she would encourage students to fill one or two of their electives with a financial planning course, something she wishes someone had suggested to her before she graduated.
Sven Saaretalu, a part-time graduate instructor and doctoral student in the Personal Financial Planning program, teaches PFP 3301: Introduction to Personal Finance. A class, Saaretalu said, every student should take.
PFP 3301 touches on the basics of personal finance, covering topics such as taxes, retirement, mortgages, car loans and investments.
“It’s like food,” Saaretalu said. “You eat it every day, so you have to know how the nutrition works. Maybe not in detail, but enough to know it’s not good for you to eat burgers all of your life.”
Saaretalu said it is the same with finances. He said although some students may work and have money, they need to know how to save it or spend it wisely.
Saaretalu said he does not blame all students for their financial unpreparedness. He said financial irresponsibility is often a result of culture or how people grew up.
Saaretalu said he would also attribute lack of financial knowledge to fear. He said because financial lingo can often be complicated or intimidating, it scares people away, making them think it is impossible to learn.
“The biggest advantage this generation has is the internet,” Saaretalu said. “By getting online and looking things up for yourself, you can figure most things out. The question is, are you willing to search it yourself?”
Saaretalu said some students do not spend their time wisely enough. He said, to them, everything is about having fun, but they need to sit down and think about reality.
“Most people think that because they aren’t buying a house today, they can just figure it out in five years,” Saaretalu said. “The problem is, when the time comes, you’re going to try to apply for a mortgage and you won’t have the money for a down payment.”
Saaretalu said if you do not plan now, it may end up costing you later.
Kaylyn Adams, a graduate student in the Personal Financial Planning program, is the president of Red to Black, a program that promotes financial literacy across the Texas Tech campus.
In Red to Black, students in the Personal Financial Planning program meet with students who have financial questions. Adams said peer counseling builds camaraderie between the students because they are speaking with someone who is in the same season of life.
In addition to counseling, Red to Black sets up booths and does presentations for everything from budgeting for freshmen to preparing seniors for life after college. Adams is currently working on an initiative to reach out to high school students.
“You develop an attitude toward money when you’re young that will carry through to your adult life,” Adams said. “The younger you start creating good habits, the more successful you’ll be with your money in the future.”
Adams said a basic budgeting technique is simply to know where your money is going. A motto Red to Black goes by is, “Tell your money where to go, don’t ask where it went.” Adams said knowing where each dollar goes will make you more conscious of your spending.
Adams said students are on each end of the spectrum when it comes to financial preparedness. However, she said there is always room for improvement.