College and Universities Should Teach Financial LiteracyManage Money - Essay Example

One solution is to make financial literacy a part of the core curriculum for all colleges and universities in the United States. According to Annamaria (2010), financial literacy is the capacity to make sound financial judgments, and take workable actions about the current and future utilization and management of finances. Therefore, it is important for all individuals to be knowledgeable on basic financial information to enable them make right decisions based on their needs and income. There are several important aspects of financial illiteracy in the country.

According to Braunstein et al (2005), lack of financial knowledge has increased the vulnerability of many consumers to heavy losses and deceptive business arrangements. This has resulted to some of the worst economic problems in the country such as the most recent financial downturn that was mainly caused by extensive consumer overleveraging. American universities and colleges can play a crucial role in empowering students with financial skills but historically, it has not been the case. College and university graduates play a critical role in making financial decisions in any economy, but for a long time financial literacy has been regarded as a ‘life skill’ acquired outside the classroom setting in United States (Thomas,2010,p60).

In this respect, Thomas (2010, p67-68) notes that university administrators do not consider teaching financial skills a priority in their curriculums. However, recent changes such as increasing college fees, unpredictable job market in addition to various financial challenges that face students at school and after graduating has jolted authorities in higher learning institutions to review their stance. In view of these challenges, policy makers in the United States have indentified the need of introducing compulsory financial education in these institutions to enhance the capacity of students to make sound judgments in school and after graduating.

According to Lewis(2008,p50), financial illiteracy is widespread among all American citizens, but low-income earners and people with no post secondary education are the most affected groups. A study conducted by Lewis (2008, pp56-89) found that minority groups especially African Americans and Hispanics had the lowest financial literacy level compared with other groups. In addition, American men have higher financial literacy level than women and as people grew older, their financial literacy increased (Lewis, 2008, p64).

Thomas (2010) argues that economic, health and social wellbeing of the individuals, families and societies relies heavily on financial literacy. In this respect, the importance of financial education cannot be overemphasized. At individual level, financial literacy enables a person to plan for the present expenditures and save for the future. This includes developing pragmatic household budgets that enables people to prioritize on their expenses, create saving plans and make wise investment decisions.

In addition, good financial education empowers individuals to manage their debts and make sound financial decisions for their retirement to ensure that they lead a financially secure life when they cease working (Thomas, 2010 pp 87-89). Moreover, financially literate people buy goods and services at lower prices and this enhances their savings and investments. In this respect, effective