When Prof. Terrance Odean was growing up in Minnesota, financial decisions for his parents were relatively simple.
“They didn’t have credit card debt,” says Odean, the Rudd Family Foundation Professor of Finance. “Why? Because they didn’t have credit cards. Nobody did in the 50s.”
There were no adjustable rate mortgages. They had pensions for life.
That’s all changed, says Odean, who next month will teach a Massive Open Online Course (MOOC) How to Save Money: Making Smart Financial Decisions, which aims to help people manage their money and worry less about their finances.
The free edX course, which starts April 15, focuses on how to maximize your money by making the right choices in everything from mortgages, to credit cards, insurance, stocks, and retirement savings. Sample videos from the course can be found here.
“People today don’t know if they’re saving enough or making the right investments because many have never been taught the basics about personal finance,” says Odean, who has spent a career studying the behavior of investors, particularly impulsive, overconfident investors. “There are fairly simple things you can do to improve your finances. Saving money is hard, but lowering auto insurance by a couple of hundred dollars is not that hard.”
The 5-week introductory level course is open to the public and will require about two hours of work per week, Odean said. Some practical homework problems will include checking the fees on several mutual funds, getting three auto insurance quotes, and looking up credit scores.
The course was made possible by a gift from Andrew Rudd, MBA 76, PhD 78 (Industrial Engineering), CEO of Advisor Software, and chair of the Rudd Family Foundation, whose donation is tied to a personal interest in fostering financial literacy.