People face a daunting array of challenges in managing their financial lives. Taking out student loans, managing bank accounts and credit cards, financing a home purchase with a mortgage, and saving for retirement are all consequential financial decisions. This course provides a rigorous yet accessible foundation in household financial decision-making. It introduces the analytical tools and theoretical frameworks used to help guide these decisions, including prescriptive models of saving, asset allocation, borrowing, and spending.
By the end of the course, students will be able to answer practical questions such as: Should I pay down my student loan or my credit card balance first? What financial instruments should I use to save for retirement, and how much should I save? How much of my portfolio should be invested in stocks—and how should that change over the life cycle? Is renting an apartment “throwing away money”? Which mortgage should I choose, and when should I refinance it?
The course is designed for anyone making their own financial decisions; managers and advisors supporting clients in making financial choices; professionals designing and offering consumer financial products; and leaders in the public or nonprofit sectors working to improve the financial system.
