What WPI Students Know about Personal Finance

Abstract

College graduates often don't know how to manage their money. They invested years in an education but lack the knowledge to turn their incomes into long-term financial stability. So then, what do current college students know about personal finance and economics? What are the practices that would be beneficial to prepare them for the postcollege world? 

I conducted an eighty-question survey covering a variety of financial topics and analyzed the data using descriptive statistics. Three key themes surfaced: (1) The number of finance/economic courses taken improves literacy and understanding of investing and debt. (2) There exist large gaps in general financial knowledge along with many misconceptions about the capability of financial tools. (3) Even though there is a strong self-reported desire to learn about financial preparedness, the data on literacy reflects minimal action taken to prepare oneself. The aggregate conclusion is that college students don't have enough knowledge of general financial tools and practices to be financially successful in the long-term. And although major deficiencies exist, I identified many pathways with the potential to counteract them.

A big thank you to Professor Alexander Smith here at Worcester Polytechnic Institute for all the guidance not only with the paper, but also with data collection and presentation opportunities. This research would've never left the drawing board without his continuous diligence and generosity.

Keywords: college students, behavior finance, financial knowledge, personal finance JEL classification: G11, G41, G51, G53, G11

JEL Classification: G11, G41, G51, G53