School of Management Class Offers a First-Person Approach to Finance
Aug. 23, 2010
Responding to calls for financial literacy in the wake of an historic economic downturn, the School of Management has designed a class to empower students to spend, save and invest wisely in their own behalf.
The three-credit hour course, Personal Finance (FIN 5300), explores monetary matters from a first-person perspective. The curriculum evolved from an online course that started last fall.
Budgeting, employee benefits, car purchases, home buying, credit cards, health expenses, education planning, estate planning, income taxes, insurance, investments, IRAs vs. 401Ks, lease vs. purchase options, loans — these topics and more are covered. Professor David M. Cordell, director of the School of Management’s Master of Science in Finance program, helped create the course, which he also teaches.
The course is an elective with no prerequisites. Finance majors are ineligible.
FIN 5300 wasn’t designed as an insider’s class for business students, Cordell says. Rather, the School of Management views it as a “service course,” useful on an everyday level to business and non-business majors alike, and appropriate in the nation’s stepped-up effort “to improve financial literacy across the board.”
“All aspects of any financially related issues that would affect [students’] lives on a daily basis” are fair game for study, Cordell says.
Some subjects, by necessity, have to be considered with regard to economic cycles, Cordell says. Interest rates falling to historically low levels are an example, because they may signal a good time to buy or refinance a house.
But other topics, such as understanding the nature of risk and how it affects your investments depending on your age, are more tied to individual considerations, he says.
Students of all ages can benefit from the class, Cordell notes. “Regardless of where you are in the life cycle, this course has relevance. ... Even if you are retired, these concepts are helpful.”
For older students, a shift to a fixed income might warrant a new view of budgeting, he says, or “you may want to know how to pass money on to your heirs in the most efficient way.”
For younger students, an important take-away is the time value of money, Cordell says. “This critical finance concept states that a dollar today is more valuable than a dollar next year because a dollar invested today should grow to more than a dollar next year, even considering inflation.”
One observation Cordell has gleaned from working with younger students is that they tend to get too deep into financial obligations too soon. “Time value of money helps explain one of the most important lessons for younger students — an appreciation of the importance of delayed gratification. Too many are driven far more by consumption than by investment. If they would invest more, they would accumulate much more for consumption in the future.”
Two sections of Personal Finance, FIN 5300, will be held this fall. For more information about the classes, contact Dr. Cordell at [email protected] or 972-883-2718.