The National Endowment for Financial Education (NEFE) and AFCPE have always enjoyed a supportive working relationship from each of our organizations’ early days. NEFE and AFCPE share a common goal to help individuals and families live their best financial lives through high-quality education.

One such example is how both NEFE and AFCPE use research and data to support this field. NEFE conducts in-depth opinion polling of U.S. adults on important topics related to financial education, personal finance and financial literacy. The results of this work can help professionals—including the AFCPE community—develop strategies to improve their craft.

Here are four statistics from our opinion polling this year that you can bring with you into your 2024 work: 

Feelings of Financial Well-Being to Start 2023

Each year, our first opinion poll aims to get a broad understanding of how U.S. adults view their financial well-being, measured using the Consumer Financial Protection Bureau’s short-form scale. Respondents answered a series of questions on their current financial standing as well as questions about their feelings regarding their current financial standing.

• Interesting Statistic for the AFCPE Community: When asked about having money at the end of a month, 41% say they “always” or “often” do, while 29% say they “sometimes” do and 29% say they “rarely” or “never” do.

Consumer Trust of the Financial Services Sector 

Early in 2023, we explored the current state of consumer trust in the financial services sector. While we were conducting this polling, the collapses of Silicon Valley Bank and Credit Suisse occurred, making international headlines. We pivoted our polling strategy and fielded the poll a second time shortly after news of these bank collapses happened. This allowed us to collect unique, moment-in-time comparison data.

• Interesting Statistic for the AFCPE Community: 40% of respondents who were aware of the banking crises trust financial institutions to ensure their employees were well trained and professional, while 36% disagreed with that statement.

Student Loan Repayments

Following the resumption of federal student loan payments, we fielded a poll to learn how U.S. adults, especially those who had student loan responsibilities, were planning to manage their finances following this change. 

• Interesting Statistic for the AFCPE Community: 83% of student loan borrowers responded that they would have to make budgetary changes, with one in three borrowers saying they will need to cut at least $500 per month to make their payments, and 10% estimating they will need to cut at least $1,000 per month.

Native Community Members’ Views of the Financial Services Sector

Throughout 2023, NEFE made a concerted effort to explore Native communities’ views on financial education and the financial services sector. This included in-depth polling about Native experiences.

• Interesting Statistic for the AFCPE Community: One-third of respondents say they have experienced bias, discrimination or exclusion by or from institutions and individuals within the financial services sector while seeking services related to banking, saving, lending, credit, insurance, taxes, financial planning, financial counseling and/or housing. Additionally, 15% say they are unsure if they experienced bias, discrimination or exclusion.

The AFCPE community is known for its passion to learn and improve with the goal of helping learners and clients. We hope that this data can help inform your approach to working with new or existing clients in 2024 and beyond.

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When I was a kid, I had a friend named John. John and I were as close as could be—and what unified our friendship was the love of strategy-based video games. We played them all—particularly the 90’s fad at the time, Pokemon. The only problem our friendship endured was that when we faced off in those games, he beat me EVERY. SINGLE. TIME. It wasn’t enough that I couldn’t win—I didn’t know how he did it. Time after time, he’d vanquish me in our battles, and I began to feel inferior. 

You see, I didn’t know this at the time because we were just kids, but John was a certifiable genius. One of the smartest people I’ll likely ever meet. I’m nowhere near that level of intelligence, but in my angst, I found a way to level the playing field. I began to start winning… with the use of cheat codes and glitches built into the game. Eventually, being overwhelmed with a mixture of guilt and satisfaction, I showed John my secrets to success. There were no hard feelings, but it certainly made the competition more intense. This is when I first remember learning the value of hacks, which in digital marketing, can make or break careers. 

Games are hardwired with tiny glitches and cheat codes, the same way humans are hardwired with instinctive responses. These behavioral “cheat codes” come from a variety of different evolutionary backgrounds, but they are ever-present in us today. In this article, I want to outline 3 behavioral science principles (hacks) that can help you market your firm – not to cheat folks into signing up with you, but rather to help them better understand your value and importance. When used correctly (and honestly), they can help you break through the noise and create lasting client relationships.

The reciprocity principle

I use the term ‘hack’ above to bridge the gap between how to cheat a video game and how to hack the human brain, but essentially these are hardwired human behaviors. You can tap into these to help convey a message better, frame a question better, or genuinely drive customer action. All of these hacks have the same goal, which is to drive your prospective clients to take action and meet with you. Behavioral scientists refer to these “hacks” as principles (they actually despise the term ‘hack’), and the first one that stood out to me that might be useful for financial advisors was the reciprocity principle. 

The reciprocity principle, at its core, is the fact that when you do something for someone, they’re hard-wired to want to pay you back. For instance, my wife and I have 6 chickens in a nice coop in our backyard. Naturally, we are drowning in rich, farm-fresh eggs, so we take cartons over to our neighbors. Two of my neighbors insist on bringing us homemade bread now when we do this. They appreciate the gift of our fresh eggs with no strings attached, so they are compelled to reciprocate. That’s a pretty basic example.

Okay, chickens and bread are one thing, but let’s have more of a business example. One of my favorite behavioral marketers, Nancy Harhut, has an entire chapter on reciprocity in her award-winning book titled: Using Behavioral Science in Marketing. One example Nancy shared is when she worked at a marketing agency that was employed by a financial services company. The goal was to win back financial advisors who had stopped selling their products. Winning back customers who’ve parted ways with you can be extremely difficult, so they employed the reciprocity principle in their campaign. But instead of sending these financial advisors a coffee mug, pen, or T-shirt, they sent something more personal. The team sent each advisor a framed New Yorker Magazine cartoon, loosely pertaining to selling retirement products, with the advisor’s name in it. 

“This gift was different, it was relevant, and it was personal. Can’t you just imagine the financial advisors clearing a spot on their office wall in order to display it?” (Harhut, 2022)

This campaign went on to help generate millions in sales that wouldn’t have otherwise happened. But you don’t have to spend gratuitous amounts of money on custom swag to activate reciprocity in prospective clients for your firm. Some examples of this used in marketing campaigns could be:

• Sending prospective clients a holiday, work anniversary, or birthday card. People tend to react positively when you notice dates that are important to them.
• Send a short, personal video to their inbox using Loom or Vidyard. Make sure they’ll know you took the time to reach out to them directly. In the video, give them valuable advice or quick tips. No strings attached.
• Send weekly tips, market reports, or useful articles to your prospective clients. They’ll appreciate you keeping them informed with unbiased information.

My mortgage broker sends me a monthly report on how valuable my home is in the current market. Needless to say, I’ve used them for two separate purchases, and it cost them almost nothing to stay top-of-mind with those emails. Reciprocity is more effective the more personal you make it, but the principle reigns supreme. When you offer something of value with no strings attached, folks will find a way to return the favor.

Social proof

Social proof might be one of the strongest nudges in marketing. We are nudged every single day by social proof, and sometimes we don’t even realize it. Think of a time that a decision became easier for you once you knew that others you trust had already bought in. The “all the cool kids are doing it” approach, if you will. As a business professional, I’m asked to evaluate new software or services multiple times a day. My inbox is a graveyard of sales professionals that I’ve left on “read.” When I’m looking for a new SEO or heat mapping tool, I turn to my peers and see what the industry-leading solutions are before I check the price and kick the tires. I want to know what other folks in my shoes do, and that helps me make the bulk of my decisions. 

Here’s a more entertaining example of the sheer power of social proof. In a short-lived hidden camera show called “Would You Fall For That”, actors played a trick on an innocent bystander in an elevator. Everyone else who came and went on the elevator besides this one woman, Nadia, was in on the prank. Everyone who got on the elevator, instead of facing the door once they got on, faced the back of the elevator. Nadia began facing the front of the elevator, but as the ride went on, she slowly turned to face the back like everyone else. This illustrates that social proof can not only make us more sure of our decisions, but cause anxiety, uncertainty, and stress when we stray away from the popular decision. You just have to watch it:

In his book, Influence: The Psychology of Persuasion, Robert Cialdini describes social proof as:

“Important means people use to decide what to believe or how to act in a situation is to example what others are believing or doing there” (Cialdini, 2021)

Like any behavioral principle, this can be used in the context of starting or growing your firm. Here are some examples of how you could use social proof to influence your prospective clients to engage in your services that are a little less disingenuous than tricking them (like the elevator prank):

• Include testimonials from your happiest clients. If you’re serving a specific niche, this can be extremely powerful. If you specialize in financial planning for travel nurses, feature quotes from some of your happiest clients, about how you’ve helped them secure their future while having such an unpredictable career. Put them in marketing communications and downloadable content. More prospective clients in this same niche will see others like themselves succeeding with your services. (Psst…be sure to follow proper disclosure requirements)
• Create a short video case study from one of your longer-term client relationships. This can be hard if you’re just starting out, but prospective clients will appreciate seeing someone like them reach success, not to mention familiarizing themselves with how it happens
• Encouraging your clients to leave positive reviews on your Google page or Facebook Business page can be huge. 

This might be one of the easiest principles to start using today, but it’ll require creativity to break through the noise and reach your target audience. 

Overcoming temporal discounting

I recently read about this psychological principle and immediately knew that financial advisors would relate. Temporal discounting is when folks don’t value something in the moment because the gain of the value is too far in the future. A bit like…setting yourself up for financial success?

“Behavioral scientists have found that people can be very present focused, with a preference for instant gratification. If given a choice, your customers will likely choose sooner, albeit smaller rewards over larger but later ones.” (Harhut, 2022)

How can this not apply to financial planning? We surmise that it’s more prevalent in the younger generations than in older ones, which is why serving millennial or Gen Z clients can be more profitable over the long run for financial advisors. But getting millennial clients might be more difficult when they hardly think about retirement. 

All too often, advisors just like you come upon the perfect client that fits their niche and has the resources to start planning, they just don’t put enough emphasis on investing in their future. It might frustrate you when this happens, but just know it’s a normal behavioral trait. They’d rather have that extra padding in their paycheck today than be fully matched in their employer’s 401k. 

Nancy Harhut also covers temporal discounting in her book. It turns out that studies have shown people see their future selves as strangers. In a Stanford University study, brain activity was higher among groups when they were asked to use words to describe their current selves. When they were asked to use words to describe their future selves or a stranger, brain activity decreased. Essentially, we don’t know our future selves as well, which is why brain activity decreases. And neither do your RIA’s prospective clients. Nancy goes on to suggest that if we can make it easy to bridge the gap between our prospective client’s current and future selves, we’ll have a much better chance of getting them to take action. One example she used, was getting folks to become fully matched in their employer’s 401k program. The messaging of the campaign asked the employees to envision themselves now and envision all the financial commitments they have (Mortgage, car payment, subscriptions)  to keep up a certain lifestyle. The hook became “Do you want retirement to change that?” They built a strong bridge between the employee’s present and future self and made it real by incorporating loss aversion, another effective cognitive bias.

Here are some examples of how you can overcome temporal discounting with your prospective clients:

• Run a budget with them in an early-stage meeting. Show them how much they need to invest to cover their current monthly expenses in the future. I’m sure you, the advisor, are already great at this, but keep in mind that while you’re doing it you are building that bridge between their current and future selves. Simply telling them to “imagine” what their future looks like can reinforce this bridge.
• Harness the power of regret. If your financial planning niche is people with homesteads or hobby farms, have the prospective client envision having to sell their farm and all that hard work. Regret can work in powerful ways, but if you build a bridge using it, you’re likely to help your prospective clients see that you really want to help.
• Create a targeted Facebook ad campaign. For example, if you’re working with young families, reinforce that their lives can change in an instant, which is why they should plan for the future so they don’t have to give up what they have today (loss aversion)

Temporal discounting likely affects all financial planners, which is why it can be easiest to work with folks who are already bought in and ready to be advised. But if you ever encounter a situation where it would be beneficial to spend the effort getting over the temporal discounts, hopefully, these exercises can help you. 

If any of these nudges intrigued you, I strongly urge you to read Nancy’s book Using Behavioral Science in Marketing. And also an honorable mention to Phil Agnew of the Nudge Podcast for steering me in that direction. Everyone gets their information from somewhere, and these are my watering holes. As a marketer, I’m fascinated by the research there, but as a human, I’m perplexed by how predictable we all can really be. At XYPN, we’re most interested in helping financial planners grow and flourish under their own flag. Come see what all the hype is about and find out if we can save you time, money, or stress.

Author: Sam McCue, XYPN Director of Sales & Marketing Operations

LinkedIn: https://www.linkedin.com/in/samuelmccue/

XYPN Links: Website, LinkedIn, Twitter, Facebook, Podcast

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Many financial coaches and advisors report difficulty in working to improve their clients’ consumption patterns for the purpose of increasing their savings rates. One helpful approach in this endeavor is to provide concrete evidence of the future value that a client will receive by improving his or her consumption habits today. Compound growth may be a powerful force, but it can be very difficult for individuals to visualize when it really matters.

One conclusion that is consistently unavoidable in analyzing this trove of data is that in the arena of personal-finance outcomes, behaviors matter. They matter a lot. This is an idea that we routinely discuss in a qualitative manner, but we wanted to provide a more quantitative approach to describing this reality. So we had our financial advisory team undertake the mission of quantifying—from a dollars and net-worth perspective—exactly how much behaviors matter, with a focus on the data point of the personal savings rate. 

One of the tools that DataPoints offers to its clients is the Building Wealth assessment—this tool allows an advisor to measure a client’s behaviors and attitudes in six key behavioral areas that have been shown to have a strong positive correlation to building wealth over the long-term. In fact, many of these characteristics were first identified in the research that was the foundation for The Millionaire Next Door back in 1996. Individuals scoring high on the Building Wealth assessment (referred to as “high-potential” individuals) saved on average 17% of their disposable income every month and year, as compared to only 7% for their lower-scoring peers. (And note that 7% is higher than the current national average savings rate.) That’s an additional 143% in savings every month and year for the high-potential individuals.

Quantifying Savings-Rate Future Outcomes

We talk about this significant difference in savings rate a lot, highlighting the dramatic impact that behaviors have on this critical data point and the resulting impact on individual financial well-being. But often it seems that in this discussion the real impact of this disparity in savings rate is lost because it isn’t quantified over time. After all, 17% as opposed to 7% is really only 10% more of your salary every month. Individuals (and maybe even their advisors) may think: does it really make that big of a difference when you’re talking about real-life savings figures? And by that I mean real-life dollars? And surely it must be the case that the real wealth differentiator over the long-term is investment returns, not something so simple and dull as savings rates, right? 

These are fair questions that need to be addressed. Let’s answer them by looking at a hypothetical situation and running some numbers. Here’s the hypothetical: we have two young women, Rita and Alison, fresh out of school and starting their careers as public-school educators. They are now ready to begin earning and saving at the advantageous age of 22. They both start at a salary of $30,000/year. They both receive annual pay raises to the tune of 4%. Both invest their savings in identical low-cost index ETFs earning a total annualized market return of 6%. They are identical in every financial respect except for one: Rita manages to save 17% of her gross annual salary, whereas Alison saves only 7%. And because their financial circumstances are otherwise identical, we can stipulate that the difference in savings rate is attributable strictly to spending and consumption behaviors, not a difference in economic circumstance such as outstanding student debt.

So what happens over a 40-year working career? Here’s a chart showing their respective net worth over the ensuing four decades:

At age 40, after 18 years of work, Rita has amassed roughly $211,273 in net worth compared to Alison’s $86,995. And this dollar disparity only magnifies over time. By the age of 50, Rita has eclipsed the half-million mark at $538,811 compared to Alison’s $221,863. And by the time they get to the end of their 40th year, Rita has banked a whopping $1,398,598 compared to Alison’s $575,893. 

You don’t have to be a financial planner to recognize that these disparate amounts are gong to have a significant impact on the quality and timing of Rita and Alison’s retirement.

The Role of Investment Returns 

Changing behaviors—especially spending and saving behaviors—can be hard. So hard, in fact, that it can be tempting for financial advisors and their clients alike to put their faith and hope instead in oversize investment returns. The thinking goes: “well, I’ll just have to do better on the investing side in order to make up for poor savings behaviors.” 

Let’s consider this variable by changing the hypothetical. Let’s assume now that instead of receiving the paltry market-average annualized returns of 6%, Alison is able to find an advisor or asset manager that beats the market every single year by 2.5%. We’ll keep all of the other variables the same, except now Rita earns 6% in investment returns every year as compared to Alison’s market-beating 8.5% return. 

Here’s what the future looks like now:

The additional 2.5% investment alpha every single year for 40 years closes the gap for Alison, but not nearly as much as we might have expected. Now at the end of that long period of time, Alison has amassed $995,493 as compared to Rita’s $1,398,598. Still a very significant and meaningful delta at a 40% larger retirement nest egg. 

And keep this in mind: while Rita’s result based on 6% annualized total returns and a 17% savings rate is completely plausible and largely within her control, the 2.5% investment alpha scenario (consistent and unfailing over a 40-year period) is, if we’re being realistic, largely if not completely impossible. 

Conclusions

Using future-value calculations to put dollar figures on these various savings rates over a 40-year working career vividly and dramatically paints the picture of the disparate financial results to be achieved through a change to this critical variable. In our experience, it is easy for both professional financial advisors and their clients to be focused on the more sexy data point of investment returns. But in reality the savings-rate variable has a much greater impact on long-term financial success. And as an additional plus, it also happens to be wholly within your control. 

Guest Contributor: Tim Fallow, DataPoints

December 10, 2018

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While I typically present about love and money, it could easily be stated as loving money. Guiding couples through the love and money discussion may just end up with a scenario of the couple loving their money story—“loving money.”

For individuals, money has reportedly been the top stressor for the past decade (with the exception of last year when politics took over the number 1 spot; APA, 2017). For couples, money is the consistently the top source of conflict (Dew, Britt, & Huston, 2012).

Stress

Theoretically, when faced with potentially stressful situations, individuals first evaluate whether a real threat exists…i.e., does the conversation have the ability to reduce relationship satisfaction? If so, the person then begins to evaluate available resources. For instance, have they experienced a similar situation in the past and have some ideas of what works/doesn’t work? Do they know how to broach the conversation of money with their partner? If resources are insufficient, stress results. With heightened stress comes more negative communication, which can stand in the way of developing a purposeful long-term financial plan.

Through research we learned that facilitators (including those trained in therapy and those trained in financial counseling and planning) can effectively reduce stress through money conversations revolving around core beliefs and values, emotional dimensions, and cultural influences and how these influence the couple’s relationship.

What does “effectively” really mean?

Developing curriculum to develop curriculum is fine. Publishing papers to publish papers is fine. But, to publish research that guides and informs curriculum and then researching the curriculum to publish results is what we call empirically-informed curriculum.

With the help of many students and volunteers and a willing and able funding agency, I was able to do just that. We know from research that what happens early in the relationship related to money conversations is highly predictive of later satisfaction and divorce (Britt & Huston, 2012). We also have evidence, through research, of various aspects contributing to relationship satisfaction and divorce through the years. We built those pieces into the curriculum and tested it with some willing couples. They completed a pre-test, post-test, and three month follow-up test. Results showed that couples experienced a reduction in the stress finances put on their relationship and increased happiness with their finances, communication, and household responsibilities. Even more importantly, given the impact stress has on the relationship and ability to accomplish long-term goals, we found that stress reduction was sustained three months following the conclusion of the curriculum.

We modified the curriculum based on couples’ feedback and recruited new facilitators—a Certified Financial Planner^® professional, a Licensed Marriage and Family Therapist, and an undergraduate family studies student—who had no previous exposure to the curriculum. We wanted to know whether they could produce similar results just by following the curriculum. Great news! “It worked.” In other words, across all facilitators, couples experienced a reduction in the stress finances put on their relationship and increased happiness with their finances and communication. Like the initial test, stress reduction was sustained three months following the conclusion of the curriculum.

Now what?

Incorporating empirically-based curriculum and programming is simply best-practice. It’s not time or cost effective to do something simply because we think it works. Offer programming that you have evidence will produce positive results for your clients. This will ultimately attract new clients and retain existing clients.

Note: To access the curriculum, please contact the funding agency, brightpeak financial at https://spotlight.brightpeakfinancial.com/catalyst-love-and-money-guidebook/

Guest Contributor: Danelle Rymsza, brightpeak

December 03, 2018

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When you teach personal finance, how do you know if the lessons are really sinking in? There is an added challenge when you teach adult and nontraditional learners in that you often don’t know participants’ level of financial literacy beforehand and, unless you follow up afterwards, there’s no way of measuring whether they learned anything or — the real point — if they changed any of their financial behaviors for the better after the program.

This is where evaluation comes in.  Whether your personal finance program takes place in a traditional school, community center, library, church, military base or virtual classroom, the only way to know if the curriculum works is to evaluate.

Why Evaluate?

Research from the National Endowment for Financial Education^® (NEFE^®) shows that effective financial education must be relevant to the audience, covering topics that learners are facing now and arming them with useful information. A successful personal finance curriculum must continuously measure what is working and what is not to keep up with learners’ changing needs.

Evaluations are the primary tool to measure program performance, build shared understanding of goals and outcomes within your organization and prove the value of your program to funders.

What is the Financial Education Evaluation Toolkit?

• Free tests to use in personal finance classes
• Age-appropriate questions about money topics
• Answer keys and automatic scoring
• Ready-to-use test templates for NEFE’s High School Financial Planning Program (HSFPP)

The NEFE Financial Education Evaluation Toolkit (Toolkit.nefe.org) has been updated with improved functionality and an expanded Question Bank. All questions are aligned with national personal finance standards and teachers who use the High School Financial Planning Program will find ready-to-use tests corresponding to the HSFPP modules.

How to Use Toolkit

Go to Toolkit.nefe.org and create a free account. Choose an existing test template or open a blank evaluation.

1. Choose questions from the Question Bank or write your own.
2. Send electronic evaluations to participants or print hard copies.
3. Automatically score evaluations.

There is never any charge to use the Toolkit, which is offered as a public service by the National Endowment for Education.

More About NEFE

The National Endowment for Financial Education^® provides financial education and practical information to people at all financial stages. NEFE believes that regardless of background or income level, more financially informed individuals are better able to take control of their circumstances, improve their quality of life and ensure a more stable future for themselves and their families.

To understand and meet the changing financial education needs of Americans, NEFE joins forces with thought leaders across the country and worldwide to help move financial capability forward. We facilitate rigorous financial literacy and behavioral research, convene experts on various personal finance topics and comment and engage in national public policy efforts. NEFE has built numerous programs for consumers of all ages based on research, and all NEFE resources are available at no cost.

It is NEFE’s strong conviction that, through an increased understanding of personal financial issues, all Americans can enjoy better, more secure and more satisfying lives.

November 27, 2018

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Bridges enable people to get from one place to another. People go places they couldn’t go before, or previously had to find an ineffective way to get there. At Zeiders Enterprises, Inc. we have a network of financial professionals that includes AFC^® credentialed professionals who help Service members go places they never imagined they could or would go with their finances. Zeiders helps Service members and their families by giving them the tools, education, and counseling to cross the bridge to financial well-being.

As a financial professional working with Zeiders, AFC^® professionals get an opportunity to participate in continuing education on topics that address all areas of personal finance and then hone in on how that impacts Service member families. They learn all they can to help Service members right where they are, on one side of the bridge. Our financial professionals come from a variety of backgrounds. Some have experience serving in the military or are spouses and family members of current or former Service members, while others simply have a desire to give back to those who serve.

Our network of professionals collaborates to continuously improve the community of Zeiders professionals serving military families.  They are always striving for mindfulness of hot topics that impact consumers and Service members. Training is one way we build a bridge; training is the foundation for our bridge that takes our professionals to a higher level of expertise to help clients. Zeiders financial providers engage in professional development through Communities of Practice and more specific interactive continuing education opportunities.

We meet clients where they are. Many servicemembers enter military service out of a sense of patriotism, to serve their country, while others join in search of a stable income and great benefits. Our job is to help them learn all they can about how to make their money work and grow for them, and fully use their military benefits. Most are young and come to military life with little knowledge of personal finance. Many have never had any financial literacy education nor have they been taught how to be good consumers by the adults in their lives.

They begin crossing that bridge by learning the importance of basic money management and establishing and building an emergency savings account. Next, we help clients as they cross the bridge with building credit and debt management education and counseling.  We continue with assisting them in setting short-term financial goals such as saving for something special, becoming debt free, or improving their credit score. As we get closer to crossing the bridge, we can focus on those long-term goals such as education funding, buying a home, and retirement planning. Our financial professionals also help military families with the intricacies of comparing the current Legacy retirement system to new Blended Retirement System being implemented in 2018.

We have a community of professionals who have a passion for what they do, and who thrive on seeing the military community grow in their financial well-being. As the saying goes, “we teach them to fish” whether it is from the side of the bridge or on the bank after they’ve crossed the bridge, our ultimate goal is to foster a community of families that are well educated, intelligent consumers at all levels of personal finance.

At Zeiders Enterprises, Inc. we encourage you, as an AFC^® credentialed professional, to join our team of financial professionals in helping to build the financial well-being of the military community. Find out more about openings by going to www.zeiders.com, click on “Join Us.” 

Guest Contributor: Andi Wrenn, Provider Network Manager for the Personal Financial Counselor program. awrenn@zeiders.com

November 13, 2017

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Personal Financial Planning at Kansas State University (K-State) is a nationally recognized and award-winning program that prepares students to work in diverse professions in personal finance. Known for excellence in educating and training students, the K-State Personal Financial Planning program helps to equip students with strong technical and soft skills to be successful in the real world. K-State Personal Financial Planning is home to national leaders in financial planning, financial counseling, and financial therapy, offering cutting-edge undergraduate (online and on-campus) and graduate level programs (online M.S., Graduate Certificates, and hybrid Ph.D.). Go to http://www.ipfp.k-state.edu for information about all of the certificate and degree programs. 

Financial Therapy Graduate Certificate Program

Kansas State University’s Financial Therapy Graduate Certificate program is the first of its kind in the nation to provide graduate level educational training to professionals who want to improve clients’ financial health by integrating relational, behavioral, cognitive, and emotional elements with personal finance. Upon successful completion of the program, students will be able to understand the interplay of psychology, relationships, and money. Students will also be able to implement practical techniques into their work with clients. Currently, financial therapy is an unregulated field and, therefore, educational training in the area does not lead to certification or licensure as a therapist, counselor, or planner. K-State’s Financial Therapy Graduate Certificate can be completed entirely online within 12 months, consisting of four eight-week courses.

Master’s Degree Program and PFP Graduate Certificate

The Personal Financial Planning Master’s program allows students to choose among three curriculum options to meet their needs. Whether an experienced financial professional looking to enhance their skills or someone wanting to advance their education or enter the financial field, K-State Personal Financial Planning M.S. degree offers options in financial therapy and advanced financial planning. Students who are employed full-time typically complete the online 30 credit hour program in two to three years.

K-State students have the option of beginning the master’s degree with the graduate certificate program in Personal Financial Planning. As a CFP^® Board-Registered Program, the graduate certificate qualifies you to sit for the CFP^® certification exam. Upon successful completion of the certificate program, students will transition into either the Financial Therapy Graduate Certificate program or the Advanced Planner track. Students who are already CFP^® certificants can combine the Financial Therapy Graduate Certificate and the Advanced Financial Planner tracks plus take six additional credit hours. Students also can take a financial counseling course to meet the educational requirements for the Accredited Financial Counselor^® (AFC^®) certification. The degree also fulfills the educational requirements for these designations: Registered Financial Consultant, Registered Financial Associate, and Certified Retirement Counselor.

Guest Contributor: Tierra Dimond, Program Coordinator
Inquire about the program at ipfp@k-state.edu or 785-532-1480

November 10, 2017

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My goal as the creator of Money Habitudes^® has been to make it easy for people make the connection between our financial behaviors and our emotional messages.

When individuals seem to be facing the same financial challenges repeatedly, it’s a good bet that their behavior is actually fulfilling an important emotional need. By identifying the motivation and emotional payoffs for their seemingly irrational behavior, they can either work through those needs or use strategies to get their needs met in less financially demanding ways. Here are three examples of people who were able to successfully resolve their perpetual financial challenges by identifying their emotional needs from the conversations that resulted when they saw their Money Habitudes^® results.

1. Fran, a single mom, was continually struggling to make ends meet. She spent way too much money buying her daughters trendy clothes, music lessons and experiences that she believed would be good for them.  She discovered that because she felt cheated growing up, she took great pleasure buying everything for her girls so she could live vicariously through them. That insight had not been obvious to Fran and realizing it made it easier for her to judge what did and didn’t have real value for her daughters. She was open to learning how to shop differently and how to find resources that would provide excellent experiences for children without the high price tag. Fran’s spending was more focused, and she got it under control.
    
2. Lynn was nearing retirement and was constantly giving away her money.  Her financial planner had warned her not to jeopardize her financial future. Even though she felt it was out of control, she couldn’t stop herself. Through our conversation, she had a new perspective and questions to ask her older brother. He told her that although she was too young to remember before their father died, her mother had felt trapped in an abusive marriage because she had no means of support. Her mother’s demands for academic excellence and her constantly absence working two jobs was to ensure that her daughter could go to college and be self-supporting. That was her way of loving her. Once Lynn realized that she had been loved, she began to gradually learn to love herself and realize she didn’t need to “buy” friendships. She continued to be generous but in a healthier, more financially responsible way.
    
3. In spite of a commitment to his wife to buy a house, James could never seem to save enough money make the down payment successfully. He got pretty close three times, but then gambled the money away each time. Strangely, he was not a gambler at other times. He didn’t understand it himself. Here’s what he realized. He grew up hearing his parents constantly complain about all the “no good rich folks” who lived in luxury and didn’t fix up the rundown rental properties where he and his family lived. Then there were the stories of the “no good rich folks” who swindled his grandparents out of their home. Homeownership had come to signify becoming like those “no good rich folks.” He couldn’t tolerate that image, so he subconsciously sabotaged himself. That insight helped him challenge his old messages about homeowners, and he was successful on his fourth try.

In each of these situations, a logical reason to change behaviors would be overwhelmed by the reinforcing emotional payoffs. To be as effective as possible, financial professionals would be well served to encourage conversations that help clients see the connection between their persistent financial behaviors and their emotional messages. Using financial coaching techniques, developing excellent listening skills and reaching out to work with other professionals who are more skilled in these emotional areas are all ways to help your clients be more successful. And I would be remiss if I didn’t mention that Money Habitudes^®  cards or the online version are a proven way to start conversations that often lead to these types of insights in a non-judgmental, non-threatening way.

Guest Contributor: Syble Solomon

Syble Solomon is the founder of LifeWise Strategies, a popular speaker on the psychology of money, the creator of Money Habitudes^® and an executive coach. AFCPE honored her as the Mary Ellen Edmondson Educator of the Year, and the North Carolina Jump$tart Coalition named her the Outstanding Contributor to the Financial Education of Youth. She has been the keynote speaker for events for universities, international women’s groups, independent financial planners, the NFL and non-profit organizations. Washington Post’s financial columnist Michelle Singletary called Money Habitudes the simple, but extraordinarily insightful game. It is available in the original card version for adults (English and a new Spanish version), teens and young adults (also a new version) and the new online version.  Contact her at syble@lifewise.us or www.moneyhabitudes.com.

November 09, 2017

The post Bridging the Gap between Money and Our Emotional Messages appeared first on AFCPE.

It all started with scribbled notes on the back of a napkin. As a financial coaching organization led by experienced frontline practitioners, we were all too aware of the gaps programs face that can take precious time away from serving customers, such as finding access to the resources and answers that customers need to succeed or effectively tracking data to discover patterns and improve services. Then the ‘aha’ moment: We could leverage the innovation of financial technology to boost nonprofit missions and outcomes! Thus, Change Machine was born. A dynamic, web-based financial coaching platform, Change Machine contains all the tools and resources practitioners need to address their customers’ underlying financial insecurity. It bridges the gap for financial coaching services in three crucial ways:

1. Meeting Coaches Where They Are
   
   Change Machine provides a one-stop-shop for practitioners, whether they are brand new to financial coaching or a seasoned professional looking to refresh and expand their skills. The LEARN portal features self-paced lessons and quizzes that start with the basics and build out into a ‘choose your own adventure’ course of specializations. Plus, we hold monthly virtual trainings to dig further into specialty skills and specific sectors. When meeting with a customer, coaches can instantly access over 150 tipsheets and worksheets through the Toolbox to guide customers through their unique financial insecurities — from identity theft to student loans to filing taxes and more. It’s as easy as typing in the issue area and sending it to the printer! (P.S. Download a selection of free tools here)
    
2. The “D” Word
   
   Data management can be intimidating, time-consuming, and yet necessary for fundraising. It is also an important element when trying to improve service delivery and programming. It doesn’t matter how big or small your organization is, Change Machine makes data management easy and painless. Data is collected organically in coaching meetings through COACH’s intake process and customer management portal. Outcomes are tracked in six areas: assets, banking, credit, debt, taxes, and (most importantly) goals. Then, MANAGE gives supervisors special access to slice and dice customer and staff data with both out of the box and custom reporting capabilities. As one client explains, “Our staff recognizes that for us to be sustainable as an organization, we need to demonstrate the value of our services. Change Machine provided us with a platform to really track what the financial impact on our participants’ personal finances is – and that was hugely valuable. Without that, you’re just making the qualitative argument as to the quality of the service you’re providing.” (Alex Breen, Senior Associate, Seedco)
    
3. Connecting Coaches, Near and Far
   
   “I get by with a little help from my friends.” Or a lot. Financial coaches are amazingly versatile in their ability to support customers in any area where they find a financial barrier. Yet, there was no way to apply that knowledge to the field broadly. Until now! Change Machine’s SHARE is an online community of over 1,000 practitioners nationwide. Financial coaches can get their toughest questions answered, share best practices and pertinent news, and celebrate success stories.

Financial coaches deserve the same level of support that they provide to their customers every day. Change Machine seamlessly bridges skills training with data collection with service delivery with a strong community of practice. We give coaches and programs the freedom to concentrate on what really matters — building financial security for themselves and their communities.

Guest Contributor: The Financial Clinic

November 08, 2017

Empowering financial coaches through Change Machine

The post Happy Change-Making! appeared first on AFCPE.

We’ve all heard the old adage: give a man a fish, and he’ll eat for a day, but teach a man to fish, and he’ll never be hungry again. It was with that in mind that MAX by AccessLex^® was designed, to be a sort of personal finance bait and tackle box, if you will. A first-of-its-kind comprehensive, innovative and effective financial education program created expressly for law students. With its in-depth curriculum and multi-faceted approach, MAX was built to drive the knowledge gain and behavior change essential to making sound financial decisions while in school — and in life.

Because at a time when complaints about student loan servicers jumped more than 300% in the first three months of this year compared with the same period a year ago, and the nation’s largest student loan servicer is on record as saying, “There is no expectation that the servicer will act in the interest of the consumer,” loan counseling has never been more needed.

And yet, debt management isn’t the whole story. Law students need an education in personal finance that lays the foundation for making informed financial decisions, about student loans and about so much more. But, law school is an investment, and often a tremendously expensive one. And students need to understand the short- and long-term implications of the decisions they are making.

In other words, law students need to learn how to fish.

Of course, creating a program to improve financial capability among students in any discipline is obviously a good idea, but a lot of things look good on paper. We knew that to truly make this an impactful resource, we had to get into the heads of our specific end users: law students. We had to know what they wanted and needed in a program like this. And we had to learn what would keep them engaged.

So, we asked them.

We initiated a pilot program to test specific program elements and delivery mechanisms with more than 5,000 law students and administrators at over 40 law schools contributing to focus groups and surveys.

Participants generously offered their insight on everything from financial knowledge and current financial behaviors to what schools and students want – and need – in a personal finance program.

The feedback was outstanding — and very revealing. Of the students surveyed:

• 25% don’t budget or track their spending;
• 42% worry about being able to pay for their monthly expenses;
• 70% feel stressed about personal finances;
• 77% are worried about their student debt growing; and
• 85% of respondents gave themselves a grade of B- or lower for ‘personal finance knowledge.’

Students further commented that a law school that offered a well-defined personal finance curriculum would be viewed as “caring about their students as individuals” and “respectful of the substantial financial investment to attend.” Many described it as a “selling point.”

With these and many other insights gleaned from the pilot, we created MAX to leverage the strengths and skillsets of law students, address their weaknesses, and acknowledge their pain points – those times they feel most beleaguered and overwhelmed by their finances on top of everything else that law school is throwing at them.

MAX is designed to provide a robust financial education incrementally, in smaller, easily digestible bursts. And to accommodate law students’ different knowledge bases and learning styles, MAX takes a building-block, multi-format approach that combines in-person workshops, online and virtual programming, and one-on-one personal counseling – all facilitated by our team of Accredited Financial Counselors (AFC^®). In a six-week registration period earlier this summer, 120 law schools signed on as MAX schools in the program’s first year, and already over 2,500 students have established MAX online accounts.

MAX creates a path for every student to put every student on the path to success. Because it’s true: give a man a fish, and he’ll eat for a day, but teach a man to fish, and he’ll never be hungry again.

Guest Contributor: Billy Thompson, Communications Manager at AccessLex Institute

November 07, 2017
AccessLex Institute Releases New Program to Maximize Law Students’ Financial Capability

The post Casting a Net Gain for Law Students appeared first on AFCPE.

A good credit history is crucial in today’s economy. Far more than just a number, a good credit score is a prerequisite for everyday financial services like a low-cost credit card, a bank account or car loan. A good credit history can make the difference in accessing the affordable lending products necessary to go to college, buy a home, or start and grow a small business. Renting an apartment, paying for car insurance, signing up for utilities and even landing a job can also be affected by a person’s credit history – or the absence of one. Yet, 26 million Americans are “credit invisible,” meaning that they do not have any credit history with the three main credit reporting bureaus.

For many low-income individuals with no or “thin credit files,” the ability to establish a good credit history is hindered by lack of access to affordable mainstream credit building financial products. Individuals with poor or thin credit often rely on payday loans to meet their credit needs. The high-cost of these loans, combined with the fact that on-time payments are not reported to the credit bureaus, prevent people from building credit and other assets, often across generations. Without a strong credit history, it is difficult, if not impossible, for households to get and stay ahead.

 Credit building is a powerful tool that helps individuals and small businesses take control of their financial lives and supports asset-building goals, such as homeownership, small-business ownership and the pursuit of higher education. Credit building is defined as the act of making on-time monthly payments on a financial product such as an installment loan or a credit card that is reported by the creditor to the major credit bureaus. Credit Builders Alliance (CBA) believes that responsible credit building pairs reporting payments to the credit bureaus with relevant and timely credit education; opening and successfully managing financial products is key to building and maintaining a good credit history.

A good credit history is not only an asset; it is the means to greater and more sustainable financial stability, savings and asset building opportunities. Over the last ten years, nonprofit and community-based organizations, financial capability practitioners, and even local governments have begun to embrace credit building as integral to helping low- and moderate-income and other underserved constituents build and sustain financial assets. This progress has been accomplished be innovating new credit building products, expanding access to responsible credit building products through relationships with financial institutions, and raising the profile and need for innovative solutions such as alternatives to payday lending and Rent Reporting. Financial coaches and counselors can continue to leverage their resources to support responsible credit building programs and policies that combine access to safe, affordable financial products with skilled and relevant financial education. In this way, they create ideal conditions for individuals and families to build credit and assets.

Credit Builders Alliance (CBA) is a nonprofit organization creating innovative solutions to help non-traditional financial and asset building institutions, serving low and moderate-income individuals, build client credit and financial access to grow their businesses and/or personal assets.

[i] CFPB Office of Research (2015) “Data Point: Credit-invisibles,” retrieved from http://files.consumerfinance.gov/f/201505_cfpb_data-point-credit-invisibles.pdf.

Guest Contributors: Carmina Lass and Alesha Klein, Credit Builders Alliance

Stop by CBA’s exhibit booth at the 2017 AFCPE Symposium to learn more about how they can help you move people from poverty to prosperity through credit builiding

November 06, 2017

The post Bridging the Gap through Credit Building appeared first on AFCPE.