Financial Planning, Managers, and College Students
Volume 28 Number 7 2002
35
Financial Planning, Managers, and College
Students
by Joe James, W. Hadley Leavell, and Balasundram Maniam, Sam Houston State University, P.O. Box 2056, Huntsville, TX 77341
Abstract
Prior research indicated workers including many college students were ignorant regarding their own finances, future wealth, and retirement planning although in their business courses they learn the importance of managing and maximizing other peoples’ wealth.
To obtain an idea of future retirees’ knowledge and perception of their retirement planning and computations, a survey of several sections of junior and senior level students at a regional university in Texas in two different introductory finance classes was conducted at the beginning of the semester and then again at the end. The results support the lack of basic knowledge possessed by these future retirees prior to exposure to the financial aspects of business as applied to their personal planning. As expected, this single introduction made a measurable difference in their understanding of the realities of retirement. It is expected that these results can actually be generalized and represent the best we can expect from the public at large.
Introduction
In spite of the many warnings signs in today’s financial environment, as many as 20 million households show no intention of saving at all (Richman, 1993) and the median net financial assets of U. S. households in 1993 was just $1,000 (Aley, 1995). College students are no different from the rest of the population. As students graduate from college, they reflect the attitudes of the general population in that their main concerns are finding and holding jobs. For a vast majority, planning for retirement ranks low on their list of priorities, if at all. It is unlikely they are considering the days when they will no longer work at the earliest stages of their careers. Besides, the prospect of growing old seems either too distant or too
35
Financial Planning, Managers, and College
Students
by Joe James, W. Hadley Leavell, and Balasundram Maniam, Sam Houston State University, P.O. Box 2056, Huntsville, TX 77341
Abstract
Prior research indicated workers including many college students were ignorant regarding their own finances, future wealth, and retirement planning although in their business courses they learn the importance of managing and maximizing other peoples’ wealth.
To obtain an idea of future retirees’ knowledge and perception of their retirement planning and computations, a survey of several sections of junior and senior level students at a regional university in Texas in two different introductory finance classes was conducted at the beginning of the semester and then again at the end. The results support the lack of basic knowledge possessed by these future retirees prior to exposure to the financial aspects of business as applied to their personal planning. As expected, this single introduction made a measurable difference in their understanding of the realities of retirement. It is expected that these results can actually be generalized and represent the best we can expect from the public at large.
Introduction
In spite of the many warnings signs in today’s financial environment, as many as 20 million households show no intention of saving at all (Richman, 1993) and the median net financial assets of U. S. households in 1993 was just $1,000 (Aley, 1995). College students are no different from the rest of the population. As students graduate from college, they reflect the attitudes of the general population in that their main concerns are finding and holding jobs. For a vast majority, planning for retirement ranks low on their list of priorities, if at all. It is unlikely they are considering the days when they will no longer work at the earliest stages of their careers. Besides, the prospect of growing old seems either too distant or too
References: “A Tax-Free Road to a Secure Retirement,” Ebony, July, 2001. Boone, L.E. and Kurtz, D.L. (1989). Personal Financial Management. Homewood, Il: BPI-Irwin. Brown, Carolyn M., “Taking Stock of Your Retirement Plan,” Black Enterprise, April, 1999. Brownstein, Ronald, “Enron fall shows pension plan loss can affect politics”, The Houston Chronicle, February 22, 2002, 11A. Dingle, Derek T., “Getting Started,” Black Enterprise, May, 2001. IRC §415(b)(2), 501(c)(3), 209(b) and Department of the Treasury. (1994). Internal Revenue Service publication 560: Retirement plans for the self-employed (New York: HarperCollins, 1993), 27. Richman, L.S. (November 15, 1993). How Americans can save more. Fortune, 102, 108, & 112.