Why college students need to start learning now

Ask yourself how many times a week you think about money. How often has it come up today alone, in conversations with others, or in your own mind? Money is central to our lives, shaping everything from what we eat to where we live. 

We are constantly told how we should be using our money: how to budget, how to save and how to avoid unnecessary spending. But what about how to increase it? Nobody teaches us that. Investing and financial planning are framed as something we’ll just figure out after graduation once we get a “real” job, but waiting means missing out on opportunities to start building wealth early, and for many, the lack of financial knowledge means racking up debt without fully understanding the consequences. 

Even though a lot of us deal with student loans, credit cards and everyday expenses, personal finance education is nonexistent in most college curriculums. According to surveys, only 18% of Americans aged 18-34 can correctly answer basic financial questions, compared to financial literacy rates of around 33% in many of our peer countries. This means that countless young people enter adulthood without the skills to make informed decisions about their finances. It’s up to us to work out how to organize a budget spreadsheet and determine how to repay a loan. Sure, some of us take microeconomics or business courses, but even Economics 101 and Business Administration 100 don’t teach us how to budget, invest or build credit in real ways. For those who become fully financially independent after college, these decisions become even more pressing, and without the right knowledge, navigating them can feel overwhelming. 

Financial literacy has real consequences. According to the Financial Industry Regulatory Authority, 44% of Americans say that discussing finances makes their heart race, and 63% of Americans aged 18-34 feel anxious when thinking about them. Beyond being emotionally stressful, a lack of financial education can lead to costly mistakes. People who lack financial knowledge are more likely to do things like take on higher-interest loans, accumulate credit card debt and fail to save up for emergencies. These issues trap people in cycles of debt that could have been avoided altogether.

One of the biggest burdens that college students face today is student loan debt. Many students take out loans without fully understanding how they work. They don’t know how interest accrues, when they need to start repaying or how large of a burden their debt will be after graduation. Then suddenly, they enter the real world with thousands of dollars to pay back and no idea how to manage it. Without proper financial education, graduates can enter the work force with prestigious degrees but bad money managing skills, hindering their ability to succeed. Understanding loan repayment strategies should be fundamental to college education because for many students, their financial future depends on it. 

Beyond loans, financial literacy opens the door to opportunities like investing, which can help students build long-term wealth. It’s easy to assume that investing is just for business or economics majors, but that’s not the truth. Anyone can invest, and you don’t need thousands of dollars to start. Some apps let you invest just a few dollars and over time that can add up. After 10 years of saving $20 per month at an annual compound interest rate of 2%, you would have approximately $2,654 in your savings account. 

But despite the benefits, students avoid investing. In a survey done by Ally Invest, nearly two-thirds of people reported being scared or intimidated by investing in the stock market. When that number was broken down by age, fear was the highest among Gen Z and millennials: 69% for ages 18-23 and 66% for ages 24-37. That fear is rooted in a lack of education. People don’t know where to start or are scared of messing something up. There’s so much jargon —stocks, bonds, EFTs, IRAs — that it is overwhelming, especially when the only exposure a lot of students have is to horror stories of people losing tons of money in the stock market. The fear of making a mistake keeps them from trying.

What many students don’t realize is that the stock market isn’t the only type of investment. There are other options. For example, high-yield savings accounts, government bonds and retirement accounts, like Roth IRAs, are methods with little to no risk and still help grow money over time. But, without education, students don’t even know these options exist, much less how to use them. Universities must step in and teach students how to navigate these things, specifically investment strategies that align with varying risk profiles. 

One of the best solutions might be making financial literacy a required class. The University of Michigan already offers courses like Applied Liberal Arts 115 (The Financially Savvy Student), but these classes have a highly limited number of seats, and again, most people don’t know they exist. Instead of hoping students will seek out the information independently, financial literacy should be a required general education course like first-year writing. Beyond classes, universities should offer more workshops and real-world simulations to help students apply what they learn. These programs could teach students how to budget and invest, as well as how to build up credit and the best strategy to repay their loans. 

Some might argue that college students are already overwhelmed with finances and should focus on school instead of worrying about investing. Many students themselves might be against being forced to take a personal finance course, especially if it doesn’t seem like it applies to their major. However, finance is at the core of our lives. No matter the career path, financial skills determine how comfortably we live, how we plan for emergencies and how we manage our funds. Universities should prioritize these skills as much as any other general education requirement. LSA students are already required to take language courses, so why not require a course that directly impacts our success in the real world?

The bottom line is that financial education shouldn’t be something we have to figure out after graduation. We should be investing now, or at least trying to. The sooner we figure out how to manage and grow our money, the better off we’ll be in every aspect of life.

Téa Santoro is an Opinion Analyst studying economics. She writes about how financial trends impact students’ experiences and can be reached at [email protected].

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