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Mississippi State to Require Financial Literacy with COA Payments

It's a good idea. Hopefully it works.

John David Mercer-USA TODAY Sports

A week ago, Mississippi State posted on its official blog that it will give its athletes financial literacy training to go along with the cost of attendance payments that they'll begin receiving:

In fact, MSU actually has plans to work with Dave Ramsey’s organization to provide fiscal education to student-athletes.

“We want to make sure that they understand the basics of finance,” [AD Scott] Stricklin said. “Not that we’re going to tell them what to do with their money, but to make sure they understand how to open a checking account, set a budget and things of that nature.”

I hope it works out for the athletes involved, but there is no guarantee that it will. There is no definitive, proven link between personal finance education and improved personal finance outcomes. Some studies, like this one from the Richmond Fed from 2007, say there is. Some, as outlined in the Economist article linked before it, say there isn't.

Some of it simply has to do with math skills. If a person hasn't internalized what exponents are and mean, he will struggle with anything that involves compound interest. Some of it has to do with judgment skills. A person can get all the math correct and still wind up in bad trouble if she sets unrealistic expectations for what her future income will be. Plenty of people never figure out that there's no such thing as a free lunch and that some things really are too good to be true.

Nevertheless, it's worth a try. Some number of athletes will get value out of this and will have better financial futures than they otherwise might have. I personally have one or two disagreements with what Ramsey teaches, but for the basics, it's fine. For as many financially savvy people there are out there looking to prey on the misinformed and uninformed, it's a shame that these kinds of skills aren't more widely taught and then studied to find out which education methods are the most effective.