Wells' new course in Personal Financial Management (PFM), established through a gift by an anonymous alumna, adds a crucial practical element to our course offerings and student experience. Offered each semester, the course allows students—an average of about 70-75 enroll per year—to explore topics including banking (with an introduction to the different types of financial institutions), loans, debt ratios, budgeting, saving, investing, and credit.
The foundation of the course is goal setting. Participants learn about developing SMART goals that comply with the "3 Ps"— making your goals positive, personal, and based on the present. In order for a goal to be SMART, it must be Specific, Measurable, Achievable/Attainable, Realistic and Time-Based. Students learn to develop their short and long term goals as well as compound goals. Seniors are much more focused on handling student loans, making major purchases after graduating, or saving for housing and retirement. Younger students tend to set goals more relative to academic achievement, athletic involvement or short term savings. But all find the experience informative.
The course in its current form is taught by Eileen Price, CFP, a partner in Syracuse's Price Miller Associates. Eileen and Director of the Sullivan Center for Business and Entrepreneurship Kevin Miles collaborate to bring in experts and professionals as guest speakers. These guests—which have included representatives from First Niagara Bank, Tompkins Trust Company, and AmeriCU, Laura Burns, Director of Financial Aid as well as PFM expert Lillian Karabaic—detail some of the more nuanced parts of the topic that students are exploring and provide an extra authoritative viewpoint.
"We use numerous illustrations," said Miles. "For example, a person who invests for 10 years and then completely stops—given an average interest rate—as opposed to a friend who waits ten years and then starts investing the same amount. That friend would have to invest for 30 years to reach a similar point when it came time to retire." The goal of these lessons isn't to tell students what specific decisions to make, but to expose them to options and general guidelines.
Data backs up the value of making this experience available to students. As Miles shared, professional studies have found that students who take a PFM course during their undergraduate career—measured by similar majors and academic success—earn on average 20% more after 10 years. After 20 years, the PFM student will also have on average 800% of the savings. The studies also find lower incidence of bankruptcy or high debt ratios.
"There's no real explanation offered other than that goal setting and other knowledge and skills that the students learn removes some of the fear of investing and may help people focus on their career and financial objectives differently, so they start achieving their goals earlier than their peers often do," Miles noted. "Whatever it might come down to for each individual, the positive outcome and effect for students is really remarkably different."