Trying to explain to an individual how to budget and invest his or her money is not an easy task, which is why there is a whole industry of financial planners. It is not easy because individuals have different needs. When you go to the doctor, the doctor gives you a recommendation on how to improve your health based on your own history rather than one-size-fits all advice. However, there are still some very simple guidelines to living a healthy lifestyle that everyone can follow, just as there are simple budgeting and investing truths that can and should be shared with everyone. For graduating seniors, this advice would probably include information on budgeting money, car and health insurance, credit cards, taxes, bank accounts, tips on how to save and the basics about investing money.
I believe this is what most people, including myself, expected out of the second event of the Career Services Backpack to Briefcase series for seniors entitled "Finances -- Budgeting and Money Management." What followed was an ineffectual discussion of non-pertinent topics that the audience failed to comprehend. I want to be clear that the presenter as well as the people who put the presentation together are probably some of the most knowledgeable people on this campus when it comes to finance, especially investing. But knowing a lot about a topic and teaching that knowledge effectively, especially to college-age students, are two different things, as any Dartmouth professor can tell you.
There were two major problems with the presentation. First, the presentation did not address many of the topics that are important to graduating seniors. Tips on budgeting, a major issue for college students, amounted to two sentences and did not even merit one of the fifty-plus PowerPoint slides. These tips were simply to get a credit card in order to establish a credit history and to buy a house. That was it for budgeting. The overwhelming majority of the remaining time was spent on investing money in a diversified portfolio. I agree that this topic is extremely pertinent to graduating seniors, as saving and investing early and often is a very important thing to learn. However, saying next to nothing useful about insurance, taxes, bank accounts, and having only one tip for saving (bringing a peanut butter and jelly sandwich to work instead of eating out) left many without the knowledge they came to the seminar to find.
The second problem was the poor presentation of the included information. Focusing on retirement savings would not have been such a problem if the presentation was not an absolute disaster, leaving many in the audience dumbfounded. For starters, the presentation used theory right out of my economics 36 textbook that we spent an entire term learning and that any non-economics major would have had no knowledge about. Efficient frontiers and CAPM are great teaching tools when the audience is familiar with them, but from the groans and confused looks I saw, I doubt many were. Along the same lines, the presentation had too much industry and tax jargon. Assuming the audience knew the intricacies of 401(k) and 403(b) plans or even mutual funds, the presentation breezed through these topics in a fairly disorganized manner. Finally, the use of technical Bloomberg charts and complicated Excel spreadsheets only further confused and put off the audience.
By the end of the presentation, about a quarter of the audience had left while the rest of the audience was whispering that they had no idea what was going on. The questions at the end made it very clear where the emphasis should have been but was not. The information presented was all correct, but it did almost no good for those in the audience who could not understand the complicated jargon and fast pace of the presentation.
Unfortunately, I believe this is probably a good example of why financial education in the United States is so low. If most seminars are like this one, where a very educated audience was confused, I cannot imagine how a seminar like this would have any effect on a group of average citizens.
I'm glad that Career Services is attempting to do programs that prepare seniors for the real world; however, for these programs to do any good, they must be done effectively. By the confused looks of the seniors in the audience at the end of this seminar, I doubt that objective was accomplished.
