20 Essentials for Achieving Financial Literacy

In this time of back-to-school and educational renewal, I want to draw upon my experiences as a student, an educator and an industry professional to provide you with some real-world insights to help enhance your financial education.

Whether you're a current business or finance student, starting to think about pursuing a career along those lines or just seeking a few education pointers to help you become a more sophisticated investor, this installment of The Finance Professor has something for everyone.

Staying on Course

There is a tendency to select courses on the basis of the ease of the curriculum or grade-friendliness of the instructor. As a student, this type of strategy tends to benefit you in the short term, but later in life you will regret not having taken certain courses with more valuable, practical content. I always made the decision to take a more challenging course in order to maximize my knowledge, even though it might have come at the expense of my time or potential grade.

So this list of 20 essentials kicks off with a few courses for anyone who wants to develop a well-rounded background and solid foundation in finance and investment:

1. Economics: If you're serious about learning how the financial world works, it is a must to study both microeconomics and macroeconomics. Microeconomics is the study of how individuals and businesses make decisions to allocate resources and buy and sell products and services. This branch of economics explores the supply-and-demand relationship. Macroeconomics is the study of what makes up an entire economy and how the government plays a role in it. Topics that are included in macroeconomics are consumer spending (consumption), investment, government spending, trade balances (imports and exports), employment, inflation and taxes.

2. Mathematics: In the financial world, if you are quantitative , then the world will be your oyster. However, whether you are mathematically inclined or not, there are two courses which you must complete to ensure that your quantitative skills are up to par: business mathematics and statistics.

Business mathematics, or as we call it at Seton Hall's Stillman School of Business, "Quantitative Methods for Business," is a watered-down version of college-level calculus combined with business mathematics, such as present and future value theories, matrix math and linear programming. Statistics (or as students often refer to it, sadistics) teaches probability and statistical techniques, such as sampling, interval estimation, hypothesis testing and regression analysis.

3. Financial accounting: In previous articles, I have described the importance of understanding financial statements and financial reports. A course in financial accounting teaches the basis behind business accounting, such as double-entry accounting, financial statement analysis and generally accepted accounting principles (GAAP).