Personal finance course at Hopkins fills a need

The Baltimore Sun

You can take a course in calculus, Greek literature or mechanical engineering in college. But if you want to learn about budgeting and retirement planning, many schools have nothing to offer.

That was the case at the Johns Hopkins University until last spring. Based on the experience of young alumni working on Wall Street, the school has begun to provide an accredited class in personal finance.

"A lot of them were telling us they would have benefited from learning how to make personal financial decisions," said John C. Wierman, a professor and director of the university's Center for Leadership Education, which oversees the W. P. Carey Program in Entrepreneurship and Management.

"They were handling the job fine," he said, "but they weren't prepared to make decisions about medical benefits and retirement plans."

Seven states require high school students to take a personal finance class. And while more colleges are beginning to offer courses, it is mainly community colleges and public universities, said Leslie E. Linfield, executive director of the nonprofit Institute for Financial Literacy.

Stuart L. Ritter, a T. Rowe Price financial planner who taught the Hopkins course last semester, said: "The class was a blend of theory and application. I wanted to help the students understand not only what to do but why."

For most students, a primary issue is learning how to manage cash flow, Ritter said.

Track your spending to see where the money is going. More important, ask yourself if this is how you want to spend your money. Budgeting is about managing a finite amount of cash each month. You have to make trade-offs.

"There is no right or wrong answer, and it's not all or nothing" Ritter said. "You can buy a car and still go out to eat - you may just need to buy a used car to make it work."

It is tough to know how much you will need to save for retirement or a home when you're 20.

Ritter said a good rule of thumb is 20 percent of your income: 10 percent for retirement and 10 percent for other goals.

What about making hot stock picks? Forget it. Instead, focus on your portfolio's asset allocation and diversification, experts said.

Over 16 weeks, Ritter dedicated only two classes to investing.

For many students, the credit score is a mystery. But because it affects the interest rate you pay on loans and your ability to rent an apartment, among other things, the sooner you know about your score, the better.

Ritter has his students request a free copy of their credit reports from www.annualcredit Some students are surprised to discover they have no record.

"It's better to find out about that before you go to apply for an apartment or mortgage and get turned down," Ritter said.

Get renter's insurance and health insurance. The former will help replace your possessions if they become damaged or stolen in your apartment.

If you leave school without a job that offers health benefits, find at least a catastrophic policy that will pay for major (in other words, very expensive) medical emergencies.

Search for one at, one of the largest sites offering that service, or directly at insurance providers' Web sites. Your school's alumni office also may provide information on these plans.

Carolyn Bigda writes for Tribune Media Services.

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