Sean Karaman, a freshman at the University of Nevada, Las Vegas, hadn’t always paid close attention to his credit card spending. But after taking a personal finance course on campus last fall, he said, he is much more likely to pay as he goes. “I’ve become best friends with my debit card,” said Karaman, 21, who plays on the UNLV hockey team.More than two-thirds of states require high school students to take a personal finance class before graduation, according to the Council for Economic Education. Now, personal finance courses, offered mostly as electives, are sprouting up at public and private colleges nationwide and getting a boost from a new initiative by Stanford University. While some colleges have long offered personal finance classes, the new effort to develop and promote college-level personal finance instruction carries Stanford’s academic heft. “There really is a need among all students, and society as a whole, to learn more about personal finance,” said J. Daniel Chi, chair of the finance department at UNLV’s Lee Business School.
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Financial literacy should be a required course in WA
Annamaria Lusardi, an economist and a financial literacy researcher who has directed the Stanford program since 2023, said people today are expected to shoulder more responsibility for their finances than in the past, when jobs came with fixed pensions rather than 401(k) plans that require workers to save and invest their own funds for retirement. “We have to manage our own money,” Lusardi said. “It’s too complex, to use common sense and rules of thumb.”
Yet Americans have consistently shown low levels of financial literacy. On average, adults correctly answer only about half of 28 questions about concepts such as earnings, savings, insurance and risk comprehension, according to an annual assessment of Americans’ working financial knowledge known as the P-Fin Index. The Stanford initiative seeks to make personal finance education more accessible to more students, including first-generation college students and those from low-income families. In addition to holding an annual conference for educators, it collaborates with colleges and provides instructional materials and mentoring. It’s funded by a multimillion-dollar donation from discount-brokerage pioneer Charles Schwab, who is a Stanford alumnus; his wife, Helen; and the Charles R. Schwab Foundation for Financial Freedom, which supports financial literacy among young adults. More colleges have embraced the subject as research in the field has deepened, said John Y. Campbell, a Harvard University economist who has taught a personal finance course for several years. It also helps spark students’ interest in majoring in economics. “It turns out, it’s a very good vehicle for teaching basic economics,” he said.The courses typically cover concepts such as compound interest and the time value of money — the idea that a sum