By the time they graduate, most college students will know how to manage their time, coursework, expectations and goals. Managing their paycheck, however, may be a new challenge — and the consequences can reach far outside the wallet.
"New graduates often have not anticipated that 30 percent of their paycheck will be consumed by taxes," said Bucknell University Professor Curtis Nicholls, management. "They'll be making decisions about life and health insurance, credit and investments — and research has shown that money woes are the most common cause of relationship problems and divorce."
To help develop good habits early and avoid financial pitfalls that often beset recent graduates,the Bucknell Career Development Center's Alumni Career Services office offers seniors a Life After Bucknell series called Money Savvy.
"The Life After Bucknell Program was created more than 10 years ago to instruct students regarding proper dining etiquette," said Rachel Redmond, assistant director, Alumni Career Services. "Recently it has blossomed into a yearlong initiative that includes programming on financial planning, developing your brand, choosing a doctor/health options, housing options and more. The Money Savvy series is part of a comprehensive foundation of life skills to help new graduates live independently with confidence."
Money Savvy consists of three sessions: Budgeting, Insurance and Taxes; Investments and Saving for Retirement; and Managing Credit. This year about 180 Bucknell seniors participated in the Money Savvy series, which was developed by three School of Management faculty — Nicholls, Cindy Guthrie and Stacy Mastrolia.
Tyler Julius '16, a political science and religious studies major and environmental studies minor, attended all three sessions. "I have very little background in financial matters, and I thought it would be beneficial to take advantage of any program Bucknell offers to better prepare me for life after graduation," he said.
But even finance majors can benefit, according to Jon Walls '16, accounting & financial management, who also completed the entire Money Savvy series. "The sessions gave me the tools to ask the right questions once I have a 401(k) or investment portfolio," he said.
Mastrolia taught Walls and other students about savings tools for short-term, intermediate-term and long-term goals. But she said her most important lesson is to start saving early.
I tell students to not be intimidated or overwhelmed by the array of savings-tool choices," said Mastrolia. "Just get started saving right away — in your first job — and then keep saving and increasing your savings percent throughout your career."
Nicholls, too, stressed the importance of early saving in his presentation, which included practical examples of budgets, a typical tax situation for a young professional and online resources.
"Preparing to be an actual adult can be daunting," admitted Mary Bathon '16, a global management major who attended Nicholls' session. "Budgeting is something that has always been in the back of my head, but I'm glad I have a tool to use when I get my first paycheck. Professor Nicholls did a great job simplifying the budgeting process."
Some lessons go beyond the bank. Guthrie draws upon her past experience as a financial planner to educate students on the potential dangers of consumer debt and how financial health can affect people's personal lives. "I saw firsthand how unwise financial decisions created tension in relationships and limited the life choices of individuals and families," she said. "It's important for students to understand the consequences of their financial decisions so that they make wise choices and avoid the pitfalls of careless behavior."
Overwhelmingly, Life After Bucknell participants — both students and faculty — said they see value in discussing personal finance basics.
"I really think it benefits students to learn about these topics as they leave Bucknell and begin to live independent lives," said Mastrolia.
"Being 'money savvy' is something that is important to me," agreed Bathon. "I certainly do not want to ask my parents for help every time I file my taxes."