Taking control of your personal finances with professor X


Photo Courtesy of Personal Finance with Professor X

Matthew Roling is a finance professor with entrepreneurial experience. He virtually visited Oakland University to share his knowledge.

Jessica Orlando, Reporter

On Wednesday, Mar. 24 Beta Gamma Sigma (BGS) hosted their first webinar, featuring speaker Matthew ‘professor X’ Roling, who discussed ways students can better manage finances. 

BGS is an international business honor society founded in 1913 and has members residing all over the globe. Distinguished members include Nobel Prize winners, Olympians, inventors and CEOs of major companies. 

Roling is an adjunct professor of finance at Wayne State university as well as a previous entrepreneur. Recently, he has launched an initiative to talk about personal finances that stresses the importance of education and financial literacy.

“We really don’t do a good job of preparing adults for managing their money in the U.S.,” Roling said. 

The presentation went over some key basic concepts when it comes to managing money such as spending control, emergency funds, interest debt, credit and asset building

“Wealth is a subjective term,” Roling said. “I heard a definition of wealthy that I thought was totally on the money, and that definition was when your passive income exceeds your cash burn.”

Notably, one of the best ways in a person can control their cash burn is by keeping track of spending for at least a month to start. 

“You’re going to identify wasteful spending and fraud,” Roling said. “It’s going to give you a deep understanding of how much money you need to save for an emergency fund and you will automatically think twice before you pull out your credit card.” 

Roling argued that an individual’s “emergency fund” is one of the most important aspects of being financially responsible. It’s important to be prepared for situations that are unavoidable and costly. 

“This is a marathon not a sprint, especially if you are modest with your financial means,” Roling said. “Saving $2,000 sounds like a big number if you don’t have a ton of cash, but $2,000 is five bucks a day for a year and a quarter.” 

Unfortunately in America, it is common to carry high interest debt. Roling explained credit card companies specifically shove credit cards into the hands of young individuals hoping that they will rack up a balance. 

“Once you rank them [credit card interest rates] from highest to lowest then you should call each of the credit card companies and try to negotiate the rates down,” Roling said. 

Roling explained that once a person is able to start paying off their high interest debt and get back on track to making payments on time then they can get to a point where their credit score will go up. 

“Your credit score can impact your employment, whether or not you get a lease for an apartment and it impacts the cost of car insurance and interest rates on mortgages,” Roling said. 

An individual’s credit score is probably the most vital aspect of being financially responsible as an adult. 

“New credit and credit inquiries of the length of the accounts do not have nearly the impact on your score as your payment history and your capacity,” Roling said. 

 Asset building is a large component of building an individual’s wealth. Interestingly, there are appreciable assets and depreciable assets with the former being financially beneficial. 

“Focus on assets that pay you if you are trying to really build wealth,” Roling said, “A streaming service here and there won’t break the bank, but it’s those major cash outlays for depreciating assets that really depress your ability to accumulate wealth.”