Putting It Together: Personal Accounting

A woman working at a laptop.In economically unstable times, it’s common for people to assess the future. The desire is to have enough so you can stop working when you reach a certain age, pay for your child’s college tuition, and have money for a vacation, a home, or a car. You’re planning ahead financially, and the ultimate goal is a healthy financial future.

The knowledge you gain by studying accounting will help you in all your life’s endeavors, from paying for school to buying a house to saving for retirement.

In the Varo poll mentioned at the beginning of this module, 66 percent of adults, including 71 percent of millennials, say they are stressed because they don’t have a three-month emergency fund, and 46 percent say it’s because they don’t have any savings set aside in one to cover an unexpected expense like a job loss or medical problem.[1]

Other studies have made similar points. Less than half of Americans have enough to cover a $1,000 emergency, according to a survey from financial website Bankrate,[2] and in a similar survey, financial site GOBankingRates found that 69% of adults have less than $1,000 in their savings accounts, period. Nearly half have nothing saved at all.[3] That could explain why only 61 percent of Americans reported that they could pay an unexpected expense of $400 without credit.[4]

A Northwestern Mutual survey indicated that in 2018, 78% of respondents weren’t confident that they’ll have enough put away for retirement, and 75 percent of adults say it’s “not at all likely” or only “somewhat likely” that they’ll have access to Social Security when they retire. Even worse, 46% say that they haven’t taken any action to address the issue.[5]

Given all of these statistics, it’s important to start planning your own spending and saving as early as possible. In this module, you’ve learned various accounting tools that can assist you with:

  • Applying for financial aid
  • Balancing work and school (present needs with future goals)
  • Finding and managing other sources of income while you are in school
  • Budgeting
  • Filing income tax returns
  • Understanding credit
  • Buying a home or car
  • Investing for your future (retirement planning)

Accounting as a Career

Accounting is the lifeblood of any organization or business, and it’s a crucial part of your everyday financial health. When you do the accounting, you realize not only can this increase your chances of finding a job after graduation, but there are also many other benefits to earning your accounting degree.

You can view the transcript for “Accountants Talk About Their Dreams” here (opens in new window).

Investing, analyzing budgets, and paying down debt are just a few key concepts in both business and personal financial planning. Every time you sit down and think about how you’ll have the money to do important things you are using accounting skills.

  1. Ruark, Hannah. “Varo Money Helps Americans Improve Financial Health With High‑Yield Savings Accounts and SMS Alerts.” Cision PRWeb, March 8, 2018.
  2. Garcia, Adrian D. “Survey: Most Americans Wouldn't Cover A $1K Emergency With Savings.” Bankrate, January 16, 2019.
  3. Huddleston, Cameron. “Survey: 69% of Americans Have Less Than $1,000 in Savings.” GOBankingRates, December 16, 2019.
  4. Federal Reserve System. “Report on the Economic Well-Being of U.S. Households in 2018 - May 2019.” Survey of Household Economics and Decisionmaking, 2019.
  5. 1 In 3 Americans Have Less Than $5,000 In Retirement Savings.” Northwestern Mutual, May 8, 2018.