Allegheny College to Host Inaugural Financial Literacy Challenge
Forty-six Allegheny College students will participate in the college’s inaugural Financial Literacy Challenge on Saturday, Dec. 7, presenting a personal financial budget and investing plan appropriate for a recent college graduate. The event, which will award $5,000 in trophies and prizes, is sponsored by the Bruce R. Thompson Center for Business and Economics at Allegheny.
The students, representing 20 teams, will share their plans with a panel of six judges, each with extensive experience in the financial industry. The judges will evaluate the plans according to the Certified Financial Analyst (CFA®) criteria for excellence in financial planning and will offer feedback to students on how they can refine and improve their plans. The competition’s awards ceremony is open to the public and will take place at 2 p.m. in Henderson Auditorium in Quigley Hall on the Allegheny campus.
Chris Allison, entrepreneur in residence in the Economics Department, said the Financial Literacy Challenge supports a strategic goal of the Center for Business and Economics: to provide extracurricular activities to help students prepare for life beyond Allegheny. The competition also addresses a growing need to educate students about making sound financial decisions, Allison said.
“There has been a lot of media coverage recently about the importance of financial management for recent college graduates,” said Allison, who is coordinating the competition with Sarah Holt from the Economics Department. “It’s an urgent national need, and from the outset, we had a high level of student interest in the Financial Literacy Challenge.”
The Financial Literacy Challenge has attracted Allegheny students with majors in a variety of fields, including economics, English, environmental science, history, international studies, psychology and studio art. Approximately half of the participants are enrolled this semester in a financial literacy course taught by Allison, and the other participants entered the competition as an extracurricular activity.
Allison said the student teams each spent upwards of 20 hours developing their plans for the competition. In their plans, teams outline their financial goals and the steps to achieve them, including:
- A monthly budget
- A brief discussion of the impact of the current state of the economy
- An investment strategy that shows an understanding of the return characteristics of different asset classes, such as stocks, bonds and mutual funds
- An asset allocation, which is the mix of stocks and bonds that fits the student’s age as well as investment objectives
Allison said he emphasizes the importance of recent graduates investing at least 10 percent of their take-home pay from the beginning of their careers.
“It’s really immaterial what they invest in, just as long as they start,” he said. “We place a pretty big emphasis on index funds, which provide the widest level of diversification. You can’t beat the market so just buy the market.”
Allison added that the Financial Literacy Challenge also benefits students by providing them with exposure to successful Allegheny alumni who are serving as its judges. The competition also presents students with an opportunity to prepare for the CFA Institute Research Challenge in Pittsburgh in February 2020, Allison said.
The prizes for the Financial Literacy Challenge were provided through a gift from an anonymous longtime supporter of the Center for Business and Economics.
For more information about the Financial Literacy Challenge, visit the Bruce R. Thompson Center for Business and Economics website.