Saving Archives - AFCPE

America Saves Week 2020 – Save with a Plan: From Overwhelmed to Financial Freedom

Rachael Deleon — Tue, 25 Feb 2020 13:00:26 +0000

Overwhelmed is a word I hear frequently as a financial counselor and with good reason. When our finances are out of control, we feel “overwhelmed.” And, oftentimes, it can feel even more overwhelming to reach out for help only to receive advice with unfamiliar terminology or a plan we don’t know how to apply to our life.

But asking for help doesn’t have to be overwhelming. Financial freedom can, and should be, as fun as planning a trip. Yes, you have to do some research, but with a little bit of patience, and by breaking down your goals into small steps, you will get there.

3 steps to financial freedom:

Pay attention.
Spend less than you earn.
Invest.

1. Pay attention.

When it comes to controlling our finances, our biggest challenge is often ourselves! Most people who commit to tracking their finances for 30 days find a few surprises. Many discover over spending on groceries, fast food, small ticket items, and reoccurring subscriptions they forgot to cancel.

That last-minute energy drink at the checkout actually adds to quite a hefty sum when you add up the monthly/yearly expense. Andrew Fiebert does the math for us in his article “Money Matters so Pay Attention.” He found that if you save your $3.50 twice day rather than spending it on a specialty drink and invest in an average market fund such as the S&P 500, in ten years you would have roughly $26,608.

2. Spend less than you earn.

Depending on your situation, spending less than you earn may sound like a no brainer, or it may sound impossible. The reality is, if you are spending more than you earn you will never get ahead.

The first step in successfully spending less than you earn is knowing your numbers. Sit down and calculate your net pay – what you actually bring home minus your monthly expenses. Don’t forget to include things like the holidays, vacations, birthday parties, and car maintenance.

For expenses that do not occur on a monthly basis, take the total amount and divide it by 12 months. If you are left with a positive amount, automate that amount to go into your emergency fund, retirement accounts, or other interest-bearing accounts. If you end up with a negative amount, look for areas where you can cut back, or ways to earn additional income.

One of the biggest mistakes people make is using credit to fill the income gaps, which makes their financial situation that much more difficult to get out of and creates stress.

3. Invest.

Investing can sound complicated; however, the financial industry has been reinventing itself and has become increasingly user friendly for the average investor.

To begin investing you need to determine both your short and long term goals. Are you looking to buy a car, a home, or to retire in 10 years?

Once you understand what you are saving for you can select the financial products at a financial institution you trust that will allow you to reach your goals. Make sure you understand the fees attached with the investment tools you choose, as this can cost you thousands in the long run.

The most important decision you can make to reach financial freedom is to do something. When it comes to growing wealth, time is your best friend. The biggest mistake anyone can make in regards to their finances is to avoid them. Everyone must deal with their personal finances, and like most challenges in life, if we face them head on, we realize that it wasn’t as bad as we thought. If we ignore them however, the situation will almost certainly get worse and tap us on the shoulder at the most inconvenient time. Dedicating a small amount of time each week to understanding and gaining control of your personal finances will result in a lifetime of memories and adventures without financial stress.

Guest Contributor: Valerie Richards, AFC®

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Using Mental Accounting to Motivate Savings

Rachael Deleon — Mon, 22 Jul 2019 14:41:23 +0000

I am fascinated by the field of behavioral economics, which is a good thing since my job at Military Saves revolves around motivating service members to save. Recently, while researching something else entirely, I came across an interesting chapter on mental accounting — “Addition by Division: Partitioning Real Accounts for Financial Well-Being” — that I think not only sheds some light on why saving can be such a struggle, but also offers some concrete steps that we can take to improve saving success.

According to the authors of this piece, a group of marketing and behavioral economics professors, mental accounting is how “consumers rationalize expenditures and enhance self-control.” The term derives from real-world accounting and, simply put, is how our brains organize how we spend money. Just as financial institutions divide up our accounts into subaccounts like savings and checking, so too do our minds.

Knowing that our brains work this way can have real world implications for personal finance. For example, having earmarked accounts – both in our minds and IRL (In Real Life) can be extremely beneficial.

Earmarking Your Territory

Earmarked accounts can combine something very old school – the “club account” concept – with something very new school – online banks with low or no fees that allow for multiple subaccounts. Since, according to the authors, consumers generally find immediate use of money (spending in the here and now) more compelling and concrete than putting away money for later, a named, specific account can be a powerful tool to stimulate saving.

It is much more exciting to save for “My Cruise” or “Gabi’s Education” than in a traditional, unnamed savings account. When everything goes into one pot, it is also very tempting to use that money for other purposes.

There are several apps out there, both free and pay, that now do this for consumers – saving small amounts here and there and dumping them into earmarked accounts.

Fighting the Pain of Paying

One benefit of having separate accounts is that it allows a measure of security for those tightwads who feel the pain of spending. I have an account, funded by a small monthly deposit, that is literally named “Lila’s Discretionary.” It gives me the freedom and peace of mind to buy “wants” like a cappuccino or a magazine.

Out With the Old, In With the New

One of the most interesting points that the authors of this chapter make is that the more consumers save, the more they can experience diminishing motivation to save. For example, it is much less satisfying to contribute $5,000 to an account that has $100,000 in it than it is to contribute the same amount to an account with just a few hundred dollars in it.

The suggestion is to have “old money” and “new money” accounts, establishing a new account every few years or when reaching a certain dollar amount.

Conclusion

While behavioral economics is not some sort of magic formula that can cure the current savings crisis, it is definitely a tool in the financial counselor’s arsenal. I find that it not only helps explain why savers behave the way they do, but it also provokes deeper thinking about possible solutions.

What are some behavioral finance tricks you’ve found useful with clients or in you own life?

Guest Contributor: Lila Quintiliani, AFC®, Military Saves Program Manager

America Saves invites you to join their partners and stakeholders to discuss and strategize how to attack the nationwide savings crisis and make a tangible impact in the financial health of everyday Americans. Your voice is critical!

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Emergency Savings: How to Prepare for the Unexpected

Rachael Deleon — Wed, 06 Feb 2019 01:25:15 +0000

Dealing with an emergency is stressful, but not having the money to pay for it is even worse. Luckily, you can take steps to build an emergency savings fund so you’ll always have a financial safety net. Here are three easy ways to financially prepare for the next time you’re faced with an emergency expense.

Start by saving just $10-$20 per pay period.

Saving money doesn’t have to be a heavy lift. You can start by setting aside as little as $10 into your savings account each time you get paid. You’ll be pleasantly surprised to see how your small contributions add up over time.

You can take your savings a step further by saving automatically. Did you know that saving automatically is one of the easiest and most effective ways to save? That’s because when you save automatically, you can set it, and forget it.

Contact the human resources or payroll department at your job and ask about direct deposit. They’ll give you the right paperwork to complete. You’ll need your account number and routing number, so be sure to have that information available.

Once you begin saving automatically, you’ll be paying yourself first and your emergency savings account will grow each pay period. Saving automatically is a great way to set yourself up for success. If you start today, six months from now you’ll have half a year’s worth of savings set aside for life’s unexpected expenses. >> Learn more about saving automatically.

Ballpark your expenses to find more ways to save.

Once you have an idea of exactly where your money is going, you’ll be able to cut costs and make some changes to find more money to save. Even if you don’t think you have any money to spare, give it a try. >> Check out 54 ways to save from America Saves.

Start by calculating your income. Include your pay from work, as well as any additional income you receive. Once you’ve determined your earnings, calculate your expenses. Be sure to include your needs like your rent or mortgage, phone bill and insurance first. You can include things like entertainment later.

Subtract your expenses from your income. If you have money left over, you can increase your automatic savings deposit. The more you save now, the more money you’ll have set aside in the future. Your savings will be especially helpful in the event of an emergency. >> Learn how to plan your finances.

If you find that you have absolutely no money left over after your expenses, you might want to consider finding a secondary source of income.

Make a commitment to saving.

Savers with a plan are twice as likely to save successfully. You can set a goal and make a plan by taking the America Saves pledge. When you take the pledge, you’re making a personal commitment to save money and reach your savings goal. >> Take the America Saves pledge.

When you take the America Saves pledge, you’ll start receiving helpful savings tips about planning your finances, building credit and reducing debt. You’ll also receive information about the goal you’re saving towards.

Saving money can be made easy, start small and think big.

Guest Contributor: Darlene Aderoju, America Saves

Announcing the AFCPE^® Connect to an AFC^® Pilot

Need some additional support reaching your savings goal? We have resources to help! America Saves and AFCPE^® are partnering to connect you one-on-one with an Accredited Financial Counselor^® (AFC^®) who is committed to answering your financial questions and providing you with free and unbiased financial advice that is tailored toward your personal financial goals.

Ready to meet your savings goal? Make sure to make a commitment to save by completing the America Saves Pledge during America Saves Week 2019 (February 25 –March 2) and then complete the AFC^® interest form that will be sent to your email.

Share this opportunity!

February 05, 2019

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6 Steps to Stay on Track Financially During Times of Separation

Rachael Deleon — Mon, 17 Dec 2018 18:53:28 +0000

Times of separation are hard on a family and relationships in many ways. One of the most challenging aspects of separation is how to handle the finances – how to budget and continue to make progress toward your financial goals. Service members (SM) experience this challenge on a regular basis which is why it is vital for couples to work together on a financial plan and budget to ensure progress is made and setbacks do not occur during periods of separation.

According to a 2014 article in the Journal of Financial Counseling and Planning (JFCP), regarding stress and financial well-being of SMs, the amount of debt SM’s carry is greater than the general public. In the study 27% reported having more than $10,000 in credit card debt, versus 16% of the general population (Bell, et. al., 2014). The challenge is how to tackle the debt and avoid accumulating more during times of separation.

Budgeting while separated can be difficult. Here are 6 things to consider:

Create a solid budget prior to the separation. Every dollar of income needs to have an assignment. There are even apps available that allow both of you to view the budget from your mobile device and always be on the same page.
Consider the amount of money the SM might spend while away on the mission. These expenses can be a budget killer. To solve this, predetermine a dollar amount as part of the budget that the deployed spouse is allowed to spend. It might be helpful to simply pull this amount out in cash every month and that is all the money the SM has available for the set period. The same could be said for the discretionary spending for the spouse and family back home as well. An envelope system is a great way to budget everyday spending.
Set financial goals together! This is very important. A time of separation, while stressful, can also net some extra income and it should be decided ahead of time how that money is going to be used. For example, separation pay should have an intended purpose, like to provide child care, lawn maintenance, debt reduction, etc. If you use this “extra” money for frivolous purposes, when a genuine need arises, then the money may no longer be available.
Decide how financial decisions are going to be made during a separation. Communications may be limited and as a couple you may not always be able to discuss financial decisions. Put a plan in place to handle these occurrences. For example; how much is one person allowed to spend on an emergency without discussing it first?
Don’t let emotional spending derail your progress toward financial goals. If emotional spending is an issue for you, please discuss these feelings with a friend or professional before going on a shopping spree to make yourself feel better. A lot of poor financial decisions are made during deployments and these decisions can have lasting implications.
Set financial goals together and stick to them. It is, when one spouse acts without consulting the other during a time of separation it can be very stressful on the relationship. Whether the goal is to save or get out of debt, be sure your financial goals are aligned.

This article focuses on members of the armed forces, but these six considerations can be easily applied to any couple who finds themselves in regular periods of separation. While it can be challenging to get out of debt, don’t let a separation slow your momentum!

Guest Contributor: Susan Pascoe, AFC^®

Sources

Bell, M. M., Nelson, J. S., Spann, S. M., Malloy, C. J., Britt, S. L., & Nelson Goff, B. S. (2014). The Impact of Financial Resources on Soldiers’ Well-Being. Journal of Financial Counseling and Planning, 25(1), 41-52. Retrieved from http://afcpe.org/assets/pdf/volume_25_1/04088_pg41-52.pdf

December 17, 2018

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Evaluate Yourself

Rachael Deleon — Mon, 15 Oct 2018 16:05:08 +0000

As a personal financial counselor, I am often asked to give an overview of the services I provide to Soldiers and Airmen in my area. Although I am grateful for the opportunity, I often find it difficult to persuade service members that they can benefit from financial counseling. Most of them think they are doing fine because they can make ends meet from month to month. To get them to think beyond the next month, I ask them to do a self-evaluation of their personal finances. Below are the four questions I ask the group. The four questions that can lead them to financial freedom.

1. Do you have a written budget that you maintain and follow every month?

“A budget is telling your money where to go, instead of wondering where it went.” I make sure service members know a budget is the foundation for everything they do with their personal finances. There are many tools and resources available to help create and maintain a budget, but they must pick and choose what works best for them.

2. Do you have enough money in savings to cover six months of your living expenses?

I usually hear giggles when this question is asked because so many service members feel this is an impossible task. To help service members see this as an actual need, I ask them, “What would you do if you had to get out of the military tomorrow and you no longer had any income?” Many service members are terrified by this question because they don’t know what they would do in this situation.

3. Are you completely debt-free or do you have a debt elimination/debt management plan in place to help you control your debt?

Many of them already know what it feels like to be overwhelmed by debt or know someone who had been consumed by debt. At this point, I just make sure they understand that debt will take control of them, if they don’t get control of it. know if they don’t get control of their debt, it will eventually take control of them.

4. Are you contributing enough money monthly into your retirement account to help you reach your financial goals?

I point out that everyone eventually gets to a point where they can no longer work and we will all need money during retirement to cover our monthly expenses. The earlier we start, the better, and this is because of the effect of compounding interest.

If everyone answers yes to all four questions, I tell the group good job and keep up the good work. But I remind them that they can still benefit from financial counseling if they want to discover what they can do even better.

If someone answers no to any of my questions, I’ll make sure they know I am available to help them convert their no to a yes. The goal of this self-evaluation is to help potential clients see their need for your services. It is ineffective to tell a group of young service members that you can help them set up a budget and get out of debt without making a connection between what they want and what you can provide. These four thought provoking questions can help you bridge that gap and help your client achieve true financial freedom.

Guest Contributer: Cain Hill, AFC^®

May 02, 2017

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Become a Gold Medal Saver

Rachael Deleon — Fri, 02 Mar 2018 19:25:29 +0000

An Accredited Financial Counselor^® (AFC^®) or Financial Fitness Coach (FFC^®)Can Give You an Edge

Many things go into the making of an Olympic champion. Skill, hard work, dedication, sacrifice – and often a coach to help the athlete realize his/her full potential.

Becoming a champion saver requires the same. A commitment to save, sacrifice – and yes, a financial coach – can help you achieve Savings Gold! Our research has shown that individuals and families that work with a professional financial coach or counselor increase their savings, reduce their debt, and improve their overall financial capability.

Accredited Financial Counselors (AFC^®) guide clients in developing successful strategies for achieving their financial goals and support them as they work through their financial challenges and opportunities. Financial Fitness Coaches (FFC^®) use specialized skills and techniques that support lasting financial behavior change for their clients. Both AFC and FFC professionals work with individuals and families from all incomes and backgrounds to help them develop healthy financial habits and achieve lasting financial well-being.

During America Saves Week thousands of people are pledging to save! We hope you did too! Now it’s time to build upon that excitement and momentum and find your own financial coach or counselor to start working toward Savings Gold!

Visit our website to learn more about AFCPE’s financial counseling and coaching certification programs, and search for a professional in your area.

And be sure to check out some find top tips shared by professionals in the field, by visiting the AFCPE blog.

March 02, 2018

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America Saves Week: Bridging the Savings Gap

Rachael Deleon — Wed, 28 Feb 2018 16:34:08 +0000

With so many obstacles to saving, how do we help bridge the savings gap for individuals and families, helping to turn savings goals into successful realities and small steps into lasting financial well-being?

On Tuesday February 27, @AFCPE hosted a Twitter Chat to discuss ways to overcome obstacles to successful savings and offer suggestions and tips on #bridgingthegap. We had a great turnout with lots of information shared!

Check out some of the tweets below. Unfortunately, there was too much incredible information shared to capture it all below, so if you missed the chat or we missed your tweet, be sure to share your advice in the comments section. Let the discussion continue!

Q1. What are some of the barriers or gaps that stop people from meeting their savings goals?

A1: Life has a tendency to throw curve balls at us. Unpredictability is always a huge barrier that stands in the way of healthy savings. #bridgingthegap #ASW18 #MSW18
@PenFed

A1. One of the biggest barriers to saving successfully is getting started. Open a savings account. Establish a habit of putting money in that account regularly – whether you do that manually or automate it. Start small to save big. #bridgingthegap
@AmericaSaves

A1: Current expenses and spending habits often cloud savings goals. It’s a good idea to allocate savings first, then manage expenses #bridgingthegap #ASW18
@InviteEducation

A1: Not having secure, affordable housing gets in the way of #savings! #bridgingthegap
@KateMielitz

A1. Irregular work hours or freelance income that precludes the ability to easily automate regular savings deposits. #bridgingthegap
@moneytalk1

A1: Another barrier: cultural issues such as pressure to turn savings over to family members when they have emergencies. #bridgingthegap
@moneytalk1

A1: According to recent #JFCP research, lack of comfort w/ financial institutions & unemployment were key barriers to #saving: https://my.afcpe.org/system/journals/Vol27Issue2Art7.pdf #research #bridgingthegap
@AFCPE

A1. Savings is a key differentiator in financial wellbeing. People can face barriers in potentially multiple areas: in social & economic environment, knowledge & skills, personality & attitudes, decision making, available opportunities & behavior. #bridgingthegap #asw18 #msw18
@jerrybuchko

Q2. How can someone who is living paycheck-to-paycheck begin to accumulate savings?

A2. Get rid of debt and set aside the money that was going toward credit cards and loans. #ASW18 #bridgingthegap
@CreditDotOrg

A2: Track spending & develop and monthly spend plan, having a plan is key it allows us to be proactive as oppose to reactive #bridgingthegap, #ASW18 #MSW18
@financialfavor

A2. Start small! Even $1/day can make a difference. Starting the behavior of saving is often more important than a high $ amount of savings. #ASW18 #bridgingthegap
@Claudus19

A2. They can begin by assessing their situation to see what bills or services such as cable can be eliminated. Then take that money and deposit into a savings account. #bridgingthegap
@TThreadford

A2. Start with a budget. Be clear and honest about your income, but especially about your spending. Once you have a realistic budget, you can find ways to adjust your habits to put your savings goals first. #bridgingthegap
@MilitarySaves

A2: Commit to small dollar amounts for savings now. Long term, need to skill up for new career opportunities to increase income while staying budget disciplined. #bridgingthegap #ASW18
@InviteEducation

A2. Tracking spending can help identify areas of an budget that can be tightened to find money to save, even if it’s very small amounts. #bridgingthegap #MSW18 #MFLN
@MFLNPF

A2: For those truly living paycheck to paycheck looking at their expenses and cash flow is a vital first step, also reaching out to organizations that may provide incentives to save can help bridge the hurdle of starting. Debt reduction is also key. #bridgingthegap
@TheWisestPenny

A2. A great way to begin savings is using payroll deduction in a 401k plan or IRA. Pay yourself first! #bridgingthegap
@kalamarides

A2. Living check to check describes a generic condition but challenges can be very different depending on a person’s circumstances. Someone in poverty working fulltime for sub-living wage that barely covers basic needs faces a different challenge 1/2 #bridgingthegap #asw18 #msw18
@jerrybuchko

Q3. The retirement savings landscape is changing. What are ways to accumulate long term savings without access to a traditional employer retirement plan?

A3. Even if your employer doesn’t offer a retirement plan, you can still save for retirement – and get some tax benefits in the process – by putting money in an Individual Retirement Account (IRA). #bridgingthegap
@MilitarySaves

A3: Investing in a Roth IRA can be a great source of tax-free income in retirement. #bridgingthegap #bridgingthegap
@AFCPE

A3: There are traditional IRAs and Roth IRAs, as well as SEP-IRAs for self-employed individuals. This article breaks down the differences: http://bit.ly/2C6vWhK #bridgingthegap #ASW18
@AmericaSaves

A3. Save your money in a money market account, share certificate or IRA account. #bridgingthegap #ASW18
@AirForceFCU

Q4. Similarly, what savings tips would you provide someone who has an irregular income?

A4. Even those without regular income have regular bills to pay that can be outlined in a budget. Consider your savings goal a line in your budget! Prioritize it and be sure to put what you can afford into savings each paycheck. #bridgingthegap
@MilitarySaves

A4: A monthly spend plan is key. be conservative when planning income & save any additional income over that amount #bridgingthegap , #ASW18 #MSW18
@financialfavor

A4: Once your bank account reaches a certain limit, transfer the excess to savings (emergency and retirement). #bridgingthegap
@H_Benedict1

A4: Irregular pay? A4: Set aside $$$ from “peak” months 2 pay bills in “lean” months; plan ahead 2 transfer $$$ as needed
@moneytalk1

A4: There are digital tools available to help you adjust your budget on the fly and maximize savings month-to-month, but the real issue is adding skills to increase consistent income long term. Life is not a sprint, it’s a marathon, stay consistent. # bridgingthegap #ASW18 #MSW18
@InviteEducation

A4: Set up separate bank accounts. From the primary account, make 3 transfers per month – 1 for bills & essentials, 1 for emergency savings, 1 for longterm/essential #savings. # bridgingthegap
@AFCPE

A4: Save at least part of lump sums & windfalls such as a tax refund, settlement, gifts, or prize money. #bridgingthegap
@moneytalk1

A4. Automation can also be an irregular earner’s best friend. Automating debt can reduce interest, while automating savings can put away $$ for short or long-term goals. #bridgingthegap
@MilitarySaves

Q5. How do we set our children up with early options to save to help them build sustainable wealth?

A5. Involve your kids in the family budgeting process and let them learn from experience. #ASW18 #bridgingthegap
@CreditDotOrg

A5. A 529 college savings plan is one early way to set your child up for financial success. These accounts can be opened by parents or grandparents as early as birth and have both automation and tax-savings perks. #bridgingthegap
@MilitarySaves

A5. I like to use the piggy bank with my grandchildren. We have a picture of what they are saving for and a graph that we fill in each time they reach a certain milestone. #bridgingthegap
@TThreadford

A5: We believe you should talk to your kids about money early and often. Educating about financial wellness is a great way to set up healthy financial futures. #bridgingthegap #ASW18 #MSW18
@PenFed

A5: Explain awesome power of compound interest to kids with this calculator: https://www.econedlink.org/tool/2/ #bridgingthegap
@moneytalk1

A5: A great resource for kids books is @CFPB Money as You Grow book club. It’s about teaching “the building blocks of financial well-being – patience, planning, & problem-solving”: https://t.co/CxgOm8VB8V # bridgingthegap
@AFCPE

A5: Talk! It’s never too early to start talking to your kids about why it’s important to save. Make sure you model the behavior—walk your talk. #ASW18 #bridgingthegap
@Claudus19

A5: We also love programs like @oaklandpromise #BrilliantBaby model, which incentivizes #saving & provides #FinancialCoaching:
http://oaklandpromise.org/programs/brilliantbaby/ @sagemoney #bridgingthegap

@AFCPE

A5: For young children, physically handling money, having a piggy bank, and making trips to the bank can help turn savings from an abstract to a concrete idea. A regular allowance builds the idea of regular savings #bridgingthegap
@bizzywhiz

A5: It’s early on that children also begin forming their understanding of what work, jobs, money, earning, savings, spending, borrowing, etc mean & how each of these relates to the others within the context of their lives. #bridgingthegap #asw18 #msw18
@jerrybuchko

Q6. What savings advice do you have for families who are providing not only for children, but also for their aging parents?

A6. First and foremost, don’t stop saving for your own goals. It will always feel like there’ll be a better or more opportune time for saving, but the truth is that you’ll miss out on the benefits of saving early (#compoundinterest) by waiting. #bridgingthegap
@MilitarySaves

A6. See if your parents qualify for any government benefits that may provide you with some financial relief. #bridgingthegap
@AirForceFCU

A6: Have an, open & honest financial conversation w/your parents early. Help them prepare for later years, so you can plan ahead for #bridgingthegap
@AFCPE

A6. Consider the value of aging parents’ home in their financial planning. May be their largest asset. #bridgingthegap
@kalamarides

Q7. Why is a spending plan or budget important when building savings?

A7: A spending plan is a financial roadmap. Be sure 2 include savings 4 goals & emergencies as an expense. #bridgingthegap
@moneytalk1

A7: A budget is the cornerstone of a good financial plan. It is the best way to manage your cash flow and avoid overspending. #bridgingthegap
@AFCPE

A7. Budgets are critical piece of savings because the unexpected will happen. #FinancialWellness means not running out of money today (budget), tomorrow (insurance), and in the future (savings). #bridgingthegap
@kalamarides

A7. A spending plan is your game plan for financial success. It helps keep you on track! #ASW18 #MSW18 # bridgingthegap
@FinanceLacey

A7: How much time would you waste driving without Google Maps? Instead of guessing your way to savings, set a spending and budget plan to know when and how much to save and arrive on goals efficiently #bridgingthegap #ASW18 #MSW18
@InviteEducation

A7. A budget is the recipe for making your delicious financial cake! Without a recipe, you’ll end up with an inedible disaster By following the recipe, you know exactly how much you can afford to save while still meeting all your obligations. #ASW18 #bridgingthegap
@Claudus19

A7: A spending/budget plan can also be an important tool for reminding you about your priorities & savings goals. It’s easy to forget who you are & what you want as just getting through a typical day draws the focus of your attention in other directions. #bridgingthegap #asw18 #msw18
@jerrybuchko

Q8. How do we bridge the savings gap for people of color, closing the gap on wealth inequality?

A8 Financial Education programs in at risk communities are a must. Encouraging families and individuals to attend can be the hard part. #bridgingthegap #ASW18 #MSW18
@navicorePR

A8: “Financial advice is subsidized for wealthier households, as cost of advisor is deductible. Only 1/3 of families itemize so most can’t access that subsidy. What if we had a refundable credit for financial coaches?” @womenswealthgap #bridgingthegap
@AFCPE

A8: Education and meeting people where they are – #savings is not one size fits all. #bridgingthegap #ASW18 #MSW18
@H_Benedict1

A8: Reputable & affordable financial institutions located in minority neighborhoods; Building trust through community involvement # bridgingthegap
@financialfavor

A8. Thank you for asking this important question! Education and affordable access to it is, IMHO, key to building wealth and tearing down wealth inequality. Supporting access to HE is something we can all do in our communities using our fin knowledge. #ASW18 #bridgingthegap
@Claudus19

A8: Educate yourself & advocate for change. Remember, successful advocacy starts w/ understanding the situations of those we serve. #bridgingthegap #ASW18 #MSW18
@AFCPE

A8: Some reading & resources I’ve found helpful & can share along these lines: #bridgingthegap #asw18 #msw18
@jerrybuchko

A8: More advocacy to address larger issues related to policy-Pay equity, sick leave, affordable childcare, accessible transit systems that make it easier to get to work & other essential services #bridgingthegap
@financialfavor

Q9. What’s your number one savings tip for individuals and families who are taking the savers pledge this week?

A9: Connect with a financial coach! While meeting with a financial coach, individuals can not only receive individual support, but they can learn about these resources & more. #bridgingthegap
@financialfavor

A9. Your financial journey is like riding the NYC Subway. You can choose your stop or wait until you end up somewhere you never wanted to be. There will be delays & not all journeys take the same time but if you know where you’re going, you’ll get there. #bridgingthegap #ASW18
@investgirls

A9: Make savings automatic. Ask your employer if you can split your paycheck into two accounts – checking and savings. Or, set up automatic bank or credit union transfers to a separate savings account. #bridgingthegap #ASW18
@AmericaSaves

A9: Talk with a professional. Getting on the right track early makes a big difference, but it’s never too late to develop and plan and start saving. #bridgingthegap #MSW18
@MFLNPF

A9. My number one tip is to discover the power of saving #1percentmore. Your future self will thank you! #bridgingthegap #ASW18 #MSW18
@kalamarides

A9: Start small, but think big. Just start. Set a goal, make a plan and save automatically. #bridgingthegap
@MilitarySaves

A9. When you are trying to manage your money & save, keep your stress low. It’s hard to make good financial decisions when you’re maxed out. Stay calm and save on! #bridgingthegap #MSW18 #ASW18
@FinanceLacey

A9. Set reasonable and attainable goals so that you don’t lose motivation. #bridgingthegap #ASW18 #MSW18
@AirForceFCU

A9. Take the plunge! Once you’re in, the water will feel fine Make the pledge this week and then keep on going for the other 42 weeks remaining in 2018. You can do it! #ASW18 #bridgingthegap
@Claudus19

A9. Take stock of your savings goals & the techniques you’re using to save, then learn something new & try it. Succeeding at savings & personal finances is partly a learning process, and there is almost always something new to learn. #bridgingthegap #asw18 #msw18
@JerryBuchko

Q10. If you have questions about saving, where can you turn?

A10: Contact Cooperative Extension 4 services like classes, financial counseling, & publications: https://nifa.usda.gov/land-grant-colleges-and-universities-partner-website-directory?state=All&type=Extension#bridgingthegap
@moneytalk1

A10: Speak with your credit union about ways you can save. We have lots of financial education resources at http://bit.ly/pfculearn #bridgingthegap #CUDifference #peoplehelpingpeople
@PenFed

A10. If you have questions about savings turn to great resources like @AmericaSaves @MilitarySaves @1to1Fund and all the participants of today’ #bridgingthegap twitter chat! Thanks to @AFCPE for hosting today! #ASW18 #MSW18
@kalamarides

A10: Use our online search to find an AFC^® near you: http://www.afcpe.org/find-an-afc or check out @CFPB financial coaching initiative: http://www.findmyfinancialcoach.com/find-coach.html #ValueofanAFC #FFC #bridgingthegap
@AFCPE

A10. If Service members have questions they can check out @MilitarySaves @AmericaSaves @Military1Source or financial counselors at your installations for help. #bridgingthegap #MSW18 #ASW18
@FinanceLacey

Keep the conversation going! Add your tips and resources in the comments section below!

February 28, 2018

The post America Saves Week: Bridging the Savings Gap appeared first on AFCPE.

What Is Hygge? How can it help us live better, be happier, and save more?

Rachael Deleon — Mon, 29 Jan 2018 17:16:11 +0000

My family and I were sitting around the dinner table after Christmas, talking about the future. Where would we go when we retire one day? Where would my millennial children live and work? (The oldest embarked on her career about a year ago. The other two are in college.) Would my husband and I be near them? We talked about which states were best to retire in, which had the best economy for each of our children’s career paths. As our discussion continued, we began to talk about other countries – we knew Italy, Costa Rica, and Japan had the highest longevity. Then we decided to find out which countries were actually the happiest. In our search, we found the United Nations publishes a World Happiness Report where we saw the northern, cold countries were the happiest on earth. How could that be? They were freezing, buried in snow for months, had less daylight, less summer, and some had higher tax rates than we do.

We discovered they were happy due to their healthcare systems and other government and political interventions, but they also have a profound sense of community and social well-being built up over centuries of living in a harsh environment. They care for one another, working as communities to make sure everyone is okay. They have created a way of life – taking what some would consider difficult and turning it around to find the best in it. It is called “Hygge” (pronounced ˈHEW-gə ’ or ‘HOO-gə ’). “Hygge” is the Scandinavian word for a mood of coziness and comfortable conviviality with feelings of wellness and contentment. Itactually is the art of taking what may be negative in your life, looking at it positively instead and seeing the good within it.

Look at your shoes, are they worn and not flashy? Are you embarrassed? Shine them up and instead, be proud and think, “Look where they have taken me and where I can still go in them!” Instead of thinking “my car is old and beat up; I wish I had a new Mercedes,” look at your car and think how smart you are; how much money you kept in your pocket instead of doling out thousands of dollars of your hard-earned money to the dealership or bank! Lovingly, clean up your car. (I named my 12-year old car Bessie. Bessie has taken my children, their friends, my husband, and me on many adventures and through many experiences!).

This is such a great concept for all of us; myself, my family, friends, clients, associates, all Americans! Just think how we can save money by appreciating what we have and using small things to make us feel good. We don’t need brand new cars, big homes, brand name clothing, high-cost phone and cable services, high tech gear, expensive meals and nights out!

We can all appreciate what we have and look at our possessions lovingly, see friends more often, do volunteer work, and seek to adopt the art of “Hygge” living to be more comfortable! After all, studies show it isn’t more money that makes us happy, it is not being stressed about our money that makes us happy! Saving money does increase our endorphins! It’s never too late to start!

I wanted to start the art of “Hygge” in my home. For Christmas, one of my kids gave me a salt lamp (of course, using a coupon from a big-box store). I keep it lit in the living room. It glows a warm yellow-orange all the time and contributes to our good mood! I took out old blankets and put them on all the sofas. I left the Christmas lights up a little longer this year. My husband made Chicken Cacciatore, an Italian “hunter’s” stew with chicken thighs. It was an inexpensive, heartwarming family meal that meant more than any restaurant dinner.

I put links to “Hygge” below for you, in case you would like to research for yourself and start the “Hygge” way of living! Invite your friends over for a candlelit dinner instead of going out and spending $100 at a bar. Create warm cozy nooks in your home and play board games or read while drinking hot cocoa. Make a ritual out of making your favorite tea or coffee in a cherished cup instead of spending $5.00 on a latte.

I say hooray for “Hygge”!

May I suggest you start the art of “Hygge” too and let me know if it brought you more happiness and ways to save!

https://en.wikipedia.org/wiki/Hygge

http://www.countryliving.com/life/a41187/what-is-hygge-things-to-know-about-the-danish-lifestyle-trend/?src=social-email

http://hyggevita.com

Happy Hygge!

With Best Wishes of Warmth and Coziness,

Guest Contributor: Paula Mucci, AFC^®, Financial Coach – CFPB Financial Coaching Program Contractor – Armed Forces Services Corporation, Workforce New York Career Center

January 29, 2018

The post What Is Hygge? How can it help us live better, be happier, and save more? appeared first on AFCPE.

Important Initiatives & Top Tips: How AFC® Professionals Are Celebrating #ASW17

Rachael Deleon — Mon, 27 Feb 2017 15:27:25 +0000

America Saves and Military Saves Week is an annual promotion for good saving behavior. Organized by America Saves and American Savings Education Council, every year, thousands of organizations participate and millions of people are reached through this important initiative.

America Saves motivates and supports both low and middle-income households to increase their savings and reduce their debt. Through behavioral economics and social marketing, America Saves encourages healthy savings plans and goal setting – something that all financial professionals can get behind!

In support of America Saves / Military Saves Week, AFC^® professionals and AFCPE^® members share some of their top savings tips and what they have planned for this important week focused on savings!

Louis Bromley, AFC^®

“Start small, think big, but start.”

Plan for the week: Hosting an event at Quantico on March 2. The event will review the new Blended Retirement System and how it interacts with the Thrift Savings Program. There will be a speaker from the State Corporation Commission from Virginia speak on the different vehicles available for investing and Louis will be asking people to take the Military Saves Pledge. If they do they will receive a token for a free credit report.

Nancy Chapman, AFC^®

“Set up allotment on mypay to fund your savings account.”

Plan for the week: On Nancy’s base, there will be a static display table with finance materials in the food court area. She is teaching a class on the thrift savings plan and another on the blended retirement system. Focused on starting the savings habit early, Nancy they are reading a story about needs vs. wants to children at the CDC and talking with teens at the youth center about basic finances – while making duct tape wallets!

Meghan Gardner, AFC^®, FFC candidate

“We have automatic cars. We have automatic doors. We even have automatic walkways. Why don’t we automate our savings, too?”

Plan for the week: At Prosperity Connection in Missouri, Megan is facilitating four events that encourage participants to take the Savers Pledge:

The Cost of Being Unbanked, in partnership with a local organization that provides apartments for homeless veterans. Participants will discuss the overall cost of being unbanked, understand how to avoid fees at financial institutions, and overcome fears and concerns related to applying for an account.
Home Buying: helping participants understand FHA home loans, learn about downpayment assistance programs, and explore the mortgage process from application to approval.
Building Wealth & Automatic Savings: a program based on the book “The Automatic Millionaire” by David Bach. Participants gain insight into the importance of paying yourself first, learn strategies for automatic savings and debt reduction, and understand financial and personal net value.
Credit for Job Seekers: a group class reviewing the impact of credit on job seekers, the components of a credit report, and tips to improve credit.

Regina Harris, AFC^®

“Make a plan and stick to it.”

Plan for the week: Regina is hosting two Lunch and Learns – one on Retirement Savings and another on Saving by Retiring Debt.

Nellie Lamers, AFC^®

“Start saving now- it doesn’t matter how much, increase the amount as you can.”

Plan for the week: Nellie and the University of Missouri extension are handing out information on saving at their 5 VITA sites – including the importance of saving, determining goals you want to save for and some easy savings plans, the $100/month challenge and saving the amount of the week of the year. They are talking with their tax clients about these handouts.

Kate Mielitz, AFC^®
“It’s all about starting. Start small and stick to it.”

Plan for the week: Kate, along with fellow AFCPE member, Elizabeth Kiss, recorded radio segments for America Saves/Kansas Saves Week. Both interviews offer great tips and resources for individuals and families ready to take the first steps to saving.

Listen to Kate’s Recording.

Listen to Elizabeth’s recording.

Barbara O’Neill, AFC^®, CFP^®

“Challenge yourself to save. Complete a savings challenge.”

Plan for the week: Dr. O’Neill, along with the eXtension Financial Security for All Community of Cooperative Extension is sponsoring a national #ImSavingFor Video Contest from February 1, 2017 through the end of 2017 America Saves Week on March 4, 2017. During this five-week period, Americans of all ages are encouraged to submit a one-minute video about their personal experience with saving money. Information about the eXtension #ImSavingFor contest can be found here.

Megan Scherling, AFC^®

“When making a budget, save for your emergency fund and financial goals first, then take care of your ‘needs’, then spend what’s left on discretionary expenses, or wants.”

Plan for the week: Megan and the University of Nebraska-Lincoln Student Money Management Center will be hosting a social media campaign on their Twitter and Facebook pages and their blog.” Follow along: UNLMoneyMgmtCtr

We want to hear from you!

Share your #ASW17 and #MSW2017 plans below or tweet them using #ASW17 & #IamAFCPE.

And follow us all week long on Twitter @AFCPE and www.facebook.com/AFCPE for more great #savingstips!

February 27, 2017

The post Important Initiatives & Top Tips: How AFC® Professionals Are Celebrating #ASW17 appeared first on AFCPE.

How Financial Counseling Professionals Can Help Millennials Save for Retirement

Rachael Deleon — Fri, 27 Jan 2017 15:33:06 +0000

Saving for retirement has always been a challenge, but it’s harder than ever for many Americans today. One in three people have no retirement savings at all, and more than half of all adults have saved $10,000 or less.

When it comes to millennials, however, the news is more mixed. According to the same GoBankingRates survey,42 percent of millennials have no retirement savings. Yet those who do save are socking away a higher share of their income – about 7.5 percent compared to just 5.8 percent in 2013. Still, many millennials simply aren’t building the savings they’ll need in their later years.

AFC^® professionals are uniquely positioned to help change that trend, and it begins by educating young clients on several key points they’ll need to understand in order to save successfully.

The Value of Time

One of the greatest assets for millennials is also one of the greatest challenges: time. The ability to start small and build savings over several decades is tremendously advantageous, but many young people find it difficult to save as much as they should when they know they likely won’t be retiring for many years. Reframing this problem is one of the most important tasks a financial counselor can accomplish. Rather than being seen as a convenient excuse to put off retirement planning, young people should be guided toward the view that time is just as valuable as money when it comes to saving.

Planning for Success

Many millennials begin saving by simply stashing money haphazardly in the hope that it will someday pay off. While saving is never a bad thing in any form, young clients should always be encouraged to develop a set plan and to stick to it as closely as possible. Of course, this begins by setting realistic goals for both the client’s retirement age and the total savings they’ll need to make it happen. Whenever possible, young people should begin with their savings goals and create a budget to fit rather than the opposite.

The Many Paths to a Successful Retirement

One of the most appealing and least understood aspects of retirement planning is that it can be done in any number of different ways. Though millennials who have access to employer-sponsored retirement funds often take advantage of them, far fewer young people utilize options such as Roth IRAs, ETFs and mutual funds.

Even fewer understand the value of a health savings account, which can often make the difference between a minor inconvenience and a complete financial disaster in the event of a major medical issue. Millennials who are aware of the savings options available to them, and of the advantages and drawbacks inherent to each, tend to be far better prepared than those who don’t.

Mastering Credit and Debt

Both credit and debt have become dirty words in recent years, but millennials shouldn’t be afraid of them. They should, however, understand how to utilize them correctly. Using a credit card for routine purchases or taking out the occasional small loan can be a great way to build credit, but many young people fail to recognize the risk that larger debts pose to their ability to save for retirement. Ever-increasing student loan debt already pushes back saving for many millennials, but high-interest debts like multiple credit cards can make it nearly impossible to put aside adequate savings each month. Many people are also unaware of the assortment of federal programs that can aid in managing, reducing or even eliminating student loan debts, making this a key area to explore for those whose income is being burned away on interest and other fees.

Though surveys have shown that most millennials are optimistic about their eventual retirement, reality doesn’t always justify such a rosy outlook. Millennials simply aren’t saving enough as a group, but there’s still time for that to change. Even modest savings, if started early enough, can grow to eventually form the basis of a comfortable retirement. For that reason, the ability of skilled financial counseling professionals to guide young clients toward an effective, sustainable retirement plan is perhaps more important now than ever.

Guest Contributor: Maricel Tabalba

Maricel Tabalba is a freelance contributor for Credit.com who is interested in writing about personal finance advice for Millennials and college students. She earned her Bachelor of Arts in English with a minor in Communication from the University of Illinois at Chicago.

January 27, 2017

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Free: A Financial Counselor’s Favorite Price

Rachael Deleon — Wed, 24 Aug 2016 15:18:20 +0000

Client Support

When working with clients in a classroom setting or during a one-on-one session, it’s great to have tools and resources available to help support them in their journey toward their goal. It provides the client with an opportunity to take their future by the reigns and consider solutions that might work best for them. Having materials on-hand to thoroughly or briefly review during an appointment helps strengthen their understanding of the information you’re trying to relay. At the end of the day, it’s all about the client and their needs.

Providing your clients with materials that support their goals doesn’t have to be expensive. Who doesn’t love a bargain? When you look at the price tag and find out it’s free, you know it’s going to be a great day! Here are some great free resources available to you

CFPB Publications: Simply submit an order that can be downloaded or delivered straight to your office door free of charge. There are plenty of great materials to choose from. My personal favorites include the “Ready to Buy a Home?” slicksheet and the “How to Find the Best Credit Card for You” brochure.
FTC Publications: Everything from the topic of identity theft to paying for college is covered through materials which can be either ordered or downloaded. They even have excellent resources to begin the conversation of protecting yourself online between parents and children.
Save & Invest Resources for Military Financial Educators: You can order helpful materials for military families from DVDs and stress balls to booklets of financial information.

Self-Support

In order to be your very best for your clients, it is critical to stay attuned to updates within the ever-changing field of personal finance. This means allowing time and opportunity for self-support. Continuing education training and research on various topics can come with a hefty price, and while some are worth the investment, there are many great resources that offer free information and training. Below are a few options to help ensure that you are prepared with current information so that you can respond in the most professional manner to your clients’ needs.

CFPB’s Resources for Financial Educators: Not only can you access tools and articles but monthly webinars. Webinar topics include everything from auto loans to overall financial well-being. Even if you miss the live webinar, you can access the information via recording or read a transcript.
CFPB’s OSA News Desk: Working with servicemembers and veterans presents unique challenges, and the OSA News Desk plays a great role in communicating the specific topics seen by those working with the military population. Although this particular learning avenue tends to occur somewhat infrequently, the information is extremely value and is well-communicated through their webcasts.
Military Family Learning Network: Webinars presented by AFCPE certified professionals who are true experts on the topics discussed are geared toward those working with military families, but don’t let that stop you; the majority of the information is appropriate for a much larger range of audiences. Better yet, the information is approved by AFCPE for CEUs.
The Counselor’s Corner: As AFCPE’s new partner, CEUs are also available for webinar training through their platform. Many of the webinars are specific to housing, but they offer additional insights into credit and business practices.

Supporting your clients shouldn’t mean re-inventing the wheel, and supporting your professional growth shouldn’t always mean an excessive fee. Visit trusted sources and search through all of the information and find what best fits the needs of your clients and practice. Also, utilize your professional network to learn about new tools and upcoming training available to you.

Guest Contributor: Meghan Gardner, AFC^®, FFC Candidate and AFCPE^® member

August 24, 2016

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Help More People Start Saving

Rachael Deleon — Mon, 18 Jul 2016 15:24:52 +0000

Most people know that saving for retirement is important, but many Americans don’t have an easy way to get started. A recent report from the Pew Charitable Trusts found that more than 30 million full-time employees in the United States don’t have access to retirement savings plans at work. Other barriers, like account fees and minimum contribution requirements, can make it even more difficult for people to start saving.

Now, there’s an easy way to save that can help eliminate these common barriers. myRA was developed by the U.S. Department of the Treasury to make saving for retirement simple, safe, and affordable.

It costs nothing to open an account and there are no fees
Savers can contribute any amount they choose ($5, $50, $500 – whatever fits your budget!)¹
Withdraw the money you put into your account at any time without paying tax and penalty.
The account safely earns interest²

Saving for retirement has never been easier

Getting started with myRA is quick and easy. In fact, it only takes about 10 minutes to enroll. Each saver will need their social security number, driver’s license or other ID, and the name and birthdate of at least one beneficiary.

myRA also gives people the flexibility to choose how they want to fund their account. Savers can contribute to a myRA account from a paycheck via direct deposit, or from a checking or savings account. During tax season, savers can choose to direct some or all or their federal tax refund dollars to their myRA accounts.

See how others have started saving with myRA

Many people have already started taking steps to secure a brighter future by saving with myRA.

Lakesha Douglas is a store manager at E-Z Mart, a convenience store chain in Texarkana, Texas. She hadn’t thought much about retirement until she heard about myRA. Her growing family led her to recognize the need to plan for retirement, and myRA was an easy way to start. “I feel like I’m taking a step in the right direction with myRA,” says Lakesha.

Like Lakesha, Mariela Ortiz was introduced to myRA by her employer. An employee at Coral Gables La Salle Cleaners near Miami, Florida, Mariela had been thinking about saving for a long time, but found that getting started was difficult. She decided to open a myRA account after her human resources manager told her about the program, and since that time has been saving a small amount from her paycheck each week. “It is important for me because it’s my future,” she says.

Help people start saving today

Talk to your clients and help them start saving for a brighter future with myRA. Visit myRA.gov for more information and to download free materials you can share.

¹Annual and lifetime contribution limits and annual earned income limits apply, as do conditions for tax-free withdrawal of interest. To learn about key features of a Roth IRA and for other requirements and details, visit myRA.gov/roth-ira.
2 Accounts earn interest at the same rate as investments in the Government Securities Fund, which earned 2.04 percent in 2015 and had an average annual return of 2.94 percent over the ten-year period ending December 2015.

Guest Contributor: U.S. Department of the Treasury, myRA

July 18, 2016

Encourage Your Clients to Save with MyRA

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