John Campbell’s "Fixed" stemmed from research and teaching

John Campbell, with coauthor Tarun Ramadorai, recently released Fixed: Why Personal Finance Is Broken and How to Make It Work for Everyone, which reveals how the financial system has been manipulated to benefit financial institutions and wealthy clients, harming ordinary people in the process.

With the new book, Campbell, the Morton L. and Carole S. Olshan Professor of Economics at Harvard University, shares his journey in the field of household finance, and teaching and developing personal finance resources.

While he has taught economics at Harvard since 1994, Campbell introduced a freshman seminar on personal finance in the fall of 2017 which would transform into one of the most-enrolled courses in the department – and reveal the need for his newest book.

“I did that for three years as a way to develop course materials in this area.  Then, after a year of leave in 2020-21, I offered my personal finance lecture course for the first time in fall 2021 with no prerequisites, open to all (a 2-digit course number),” he explains.

The first year he taught the course, he capped enrollment at 70 students. Realizing there was great enthusiasm for the course, he opted to open up enrollment after the first offering. This year, he has a staggering 335 students enrolled in the course.

“I believe personal finance is a great way to teach basic economics and is extraordinarily useful to students,” he says.

Campbell’s 2006 American Finance Association presidential address on “household finance” helped christen the field. Now, household finance research, by him and many others, provides an academic backbone to his course. 

“There’s a lot of fascinating research that’s been done in the last 20 years in the academic field of household finance,” he explains.

The course and the book are related in that they both examine personal finance as a system of products, services, and contracts that is often difficult to use and needs reform.  “Both, but particularly the course,” Campbell says, “offer practical advice for individuals. Hence the student interest!”

He and Ramadorai, a 2003 Harvard business economics PhD now a professor at Imperial College, London, wrote the book to highlight the struggles of ordinary people managing their finances.  

“We argue that these struggles come from a toxic interaction between the financial mistakes people make and the financial industry that all too often exploits these mistakes rather than helping people avoid them.  A reader of our book will find a great deal of helpful advice about personal finance, but more importantly a vision of a personal finance system that is simpler, cheaper, safer, and easier to use – together with detailed practical proposals to realize that vision.”

Fixed: Why Personal Finance Is Broken and How to Make It Work for Everyone, is published by Princeton University Press.