Financial Education Archives - AFCPE

Resilience Starts with Financial Preparedness

Rachael Deleon — Tue, 18 Dec 2018 18:58:16 +0000

Disasters and emergencies happen often with little or no warning – whether it is a fire in your house or a massive hurricane, the unexpected can take a toll on your financial planning. Being financially prepared helps disaster survivors to bounce back much more quickly from a disaster, yet research by the Federal Reserve shows that about 40 percent of Americans don’t have money to cover basic needs for more than three months.

Recognizing these gaps, FEMA is encouraging the entire nation to be involved in creating a culture of preparedness, which includes financial preparedness. To help us move toward that vision, we are pleased to partner with the Association for Financial Counseling & Planning Education^® (AFCPE^®) on direct efforts to improve financial preparedness for individuals and families. To this end, FEMA and the AFCPE^® are working together to develop a training program for financial professionals that will help them to prepare their clients for emergencies. Setting up a small savings account to set aside money every month will be useful in any kind of emergency.

Beyond this, FEMA and AFCPE^® will be focusing financial readiness through tools and educational efforts aimed at helping individuals, families, and businesses understand their financial risk and be more prepared for incidents through savings and insurance. Recovering from a disaster relies heavily on preparing beforehand and having adequate emergency funds as well as money on hand.

The partnership is the latest of several efforts underway to increase financial preparedness within the United States. In partnership with Operation HOPE, we developed the Emergency Financial First Aid Kit (EFFAK). It’s a toolkit that helps individuals and families organize critical financial, medical, and household information and includes a checklist of important documents and forms to help compile information.

As part of Financial Capability Month this past April, FEMA, in partnership with the Financial Literacy and Education Commission, led a public social media campaign that reached 28 million people. We offered tips and resources to improve their financial future. As a result, orders for the Emergency Financial First Aid Kit doubled, and it’s the most requested item in our FEMA library. The timing is right and people are interested in improving their financial future.

Any kind of emergency can put stress on our financial situation. Whether it’s a broken down car or a major natural disaster, these events can wreak havoc on our savings. FEMA wants to help communities across the country to prepare for those scenarios and is proud to partner with AFCPE^® to build financial preparedness for all. As a nation, the more financially prepared we are, the more resilient we will be in the face of disasters. Emergencies happen, but we don’t have to be caught unprepared.

Guest Contributor: Carlos J. Castillo, Associate Administrator for Resilience, Federal Emergency Management Agency (FEMA)

December 18, 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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#ResearchWednesday – Financial Education as an Intervention for Health

Rachael Deleon — Wed, 29 Aug 2018 16:04:59 +0000

Financial education programs may increase financial knowledge and improve financial behaviors, but a study at Creighton University found that financial education can also improve health. The study found significant improvements in health related quality of life that were sustained two years after participation in the education program.

Single, low-income women took part in the Financial Success Program that included nine weeks of in-class training, financial coaching and monthly group seminars for one year. Researchers followed-up with the women one and two years after the program ended. The women had less overdrawn bank accounts, shut off notices, payday lender usage, and late paid bill fees. A significant increase in mean annual income was also observed. At home and work, the women reported that they better managed how financial stress impacted sleeping, relationships, and ability to work. Half of the women lost weight and trends in decreased fast food consumption were observed.

“Women under financial stress are preoccupied with pressing budgetary concerns, not long term financial goals. Our study suggests financial education that addresses immediate financial issues reduces financial stress and assists women in making more advantageous financial and health-related choices” said Julie Kalkowski, Director of the Financial Hope Collaborative and study investigator.

The study is the first to use financial education as an intervention for health and has interesting implications for the fields of personal finance and healthcare. “The findings from the study support a more comprehensive approach to health and poverty alleviation. We envision health care providers screening for financial insecurity and referring patients for financial education” said Kalkowski. “Financial coaches can contribute to client wellness by addressing the social determinants of health, including financial stability.”

Continue the Conversation:

Tell us what you think in the comments below.

Download the research (available to AFCPE members or by request from the authors): White et al. (2018). Two Year Sustainability of the Effect of a Financial Education Program on the Health and Well-being of Single, Low-income Women. Journal of Financial Counseling and Planning (JFCP), 29(1).

August 29, 2018

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1-2-3 Steps to a Dynamic Workshop

Rachael Deleon — Wed, 15 Aug 2018 16:18:14 +0000

When it comes to presenters who read their slides, audiences have reached their limit. The relentless dependence on bullet points and text-dense slides do more to bore than to entertain or inspire. In my last blog post, Presenter to Bullet Point: “You’re Fired!, I concluded with a promise to provide you with a simple process “to build a presentation from inspiration to delivery.” Delivering on that promise, below are 3 concise steps (1-2-3) to help you build a dynamic workshop.

Step 1: What is the ONE message of your presentation?
What is the one point that you want your audience to know? Whether you are persuading, instructing, or comparing and contrasting, you must be able to boil down your message to one central theme. This theme should be the glue that cements each of the 1-2-3 steps into one cohesive presentation.

For example, if you are delivering a workshop on retirement planning, is your central theme that planning today will ensure that your audience can maintain a decent lifestyle in the future? Or perhaps you want to emphasize that small savings today can have big impacts on quality of life decades down the road. There might be an unlimited number of messages a broad subject (such as retirement planning) could evoke, but you must create and stick with one central message throughout your workshop and drive that point home repeatedly.

Step 2: What are TWO (or three) key take-aways that support the main point?
These are two facts that your audience may easily recall and will help to etch the workshop into longer-term memory. If effective fact nuggets are employed, your audience will ideally share them with others, thereby expanding the impact of your presentation.

Continuing the retirement planning seminar example above: a key take-away could reflect that saving X dollars today = Y dollars in 30 years. Whatever the points, make them simple, easy to digest, and easy to repeat.

Step 3: Compose the workshop in THREE parts: Introduction, supporting body, conclusion.
Think back to the high school classroom, when the basic parts of the composition were drilled into your permanent memory: beginning, middle, and end. An essay was that simple, and every one of your workshops could—and should—be that uncomplicated too.

Your presentation should begin with a very strong question, statement, or even an image that immediatelycreates interest in your audience. The introduction should help to answer the “What’s in it for me?” question that each member of the class is asking, albeit in their heads. The introduction lets you frame that question any way you want, as long as you make it interesting.
Once you’ve figured an effective “hook” to lure your audience in, compose the body of your presentation. Of course, the body will include the key take-aways mentioned in Step 2, as well as any other supporting arguments, data, experiences, or anecdotes that further your central theme and reinforce the questions or statements made in the introduction.
The conclusion gives you, the presenter, one final chance to make your case to the audience and, therefore, should never be considered a place to wind down the workshop. On the contrary, use the conclusion to energize your audience and, once more, remind them why your presentation was so important—to them.

You will note that, in the discussion of the 1-2-3 Steps, there was no mention of creating slides, devising an animation scheme, or arranging lists of bullet points. In my personal experience, the above process will help you stick to what’s important (content) and avoids the common pitfall of creating a workshop by creating slides. Remember: your slide deck is a communication tool that should heighten the impact of the content, not hinder it. Therefore, if you begin with the 1-2-3 Steps, you should find that any slides you choose to create will almost create themselves. Almost.

While I have learned much of this approach from my own trial and error, I have also enjoyed the benefit of exceptional peer feedback. Further, I have improved by observing many other public speakers, and have learned widely from numerous publications. Some of my favorite books on public speaking are listed below:

Presentation Secrets of Steve Jobs by Carmine Gallo
Presentation S.O.S. by Mark Wiskup
Life is a Series of Presentations by Tony Jeary
Presentation Advantage by Kory Kogon and Breck England
TED Talks: The Official TED Guide to Public Speaking by Chris Anderson

I encourage you to use the 1-2-3 technique to create your next presentation. In my experience, its simplicity makes the composition of your workshop just as satisfying as the delivery itself.

Guest Contributor: David Kershberg, AFC^®

August 15, 2018

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#FridayFollow – Developing Critical Cross-Cultural Skills

Rachael Deleon — Fri, 06 Jul 2018 14:06:21 +0000

We are proud to recognize Biola University as our newest AFCPE^® Approved Education Program!

AFCPE: What inspired you to work in the field of financial planning and education?

Shane: The stock market captured my attention at a young age, and I just had to learn more. As I read and attended seminars, I was noticed and given an opportunity to teach seminars on teen investing when I was just 16 years old. I was even invited to speak to my high school teacher’s investing club one year later, which was quite intimidating as a 17-year-old! This launched me into the field of financial analysis and education. Since then I have worked as a researcher for investment firms for 10 years, earned a CFA and CAIA charter, completed a masters in mathematical finance, and I am currently a PhD candidate for personal financial planning at Kansas State University.

AFCPE: Wow that is quite the journey! Tell us a little about Biola University’s Financial Planning Program. What makes your program unique?

Shane: The Crowell School of Business is home to a CFP-board certified personal financial planning business concentration and minor. The program consists of six classes related to managing money, including topics in investments, retirement planning, budgeting, estate planning and education planning. The program allows you to sit for the CFP exam upon completion of the six classes, which gives students a powerful advantage over other job seekers.

This program is unique because every class is highly integrated with Biblical principles so that graduates of our program are well equipped to serve clients who have a Biblical worldview. Our program, having completed its first year, has built an advisory council of top financial planning firms in the area and will have mentorship opportunities, a “Meet the Firms” day every Fall, and mock planning sessions with actual advisors during the Capstone class.

AFCPE: This year, Biola University become an AFCPE Approved Education Program. What inspired you to bring this program to your university?

Shane: One of the learning objectives for our financial planning program is to serve both low-income and under-served populations with financial services. When I attended the AFCPE conference last year, I realized that the AFC^® was the missing link between the CFP curriculum and non-wealthy households. I went to school in an inner-city area and have a passion to help bring adequate financial help to those who are being overlooked. I want my students to get the same passion as I have, and also develop critical cross-cultural communication skills.

AFCPE: At AFCPE we know firsthand the impact and value of an AFC. In your words, what is the value of the AFC to this field and to students pursuing the certification?

Shane: The AFC is a credential that will enhance just about any career that involves service to others. Whether a student becomes an advisor, counselor, teacher, therapist, pastor, or non-profit worker, knowing how to skillfully address financial issues gets to the root of a basic human need that also is highly connected to their hearts. Any kind of service that addresses both physical and heart-related needs is a great human service.

Shane answers the Friday 5

My Why:

I love helping people with money-related issues.

My Favorite Quote:

“Big Gulps, huh? Well, I’ll see you later.” (Dumb and Dumber)

My Hero:

George Muller.

My Favorite Personal Finance Resource:

Treasure Principle by Randy Alcorn.

My best advice:

-For someone starting the journey to financial wellness:

If you need to spend less money, do not start by trying to control an unknowable future through “budgeting,” instead, focus on simply “tracking” a known past, and shining a bright light on your financial behavior to others and yourself, and you will begin to naturally change your habits.

-For a new professional entering this field:

Read financial news less and good classical literature more.

Shane isn’t on any social media platforms yet, but will be in the next few months. Stay tuned! If you’d like to connect with him, leave a message in the comments below.

July 06, 2018

Interview with Shane Enete 2018 AFCPE® Member & Assistant Professor of Finance at Biola University

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Presenter to Bullet Point: “You’re Fired!”

Rachael Deleon — Tue, 03 Jul 2018 14:09:30 +0000

Audiences Come Alive!

Do your eyes glaze over at the thought of sitting through another drab PowerPoint presentation? Is your own audience petrified by what dullness might be lurking behind your title slide?

When I ask audiences if they would prefer a slideshow or an informal discussion, hands down, they welcome an old-fashioned chalk-talk over a technology-driven slide presentation.

What’s going on here? Why does the technology that once awed students now inspire dread and fits of yawning?

Let us blame neither the hardware nor the software; both have come a long way. I have been privileged to teach in some technologically-advanced classrooms, and the presentation software offers increasing levels of cool with every update. Why, then, have slideshows become thoroughly uncool?

Below are four reasons I believe workshops today are frequently lackluster. (I must confess, however, that I have committed slideshow sabotage in each of these ways during my career.)

1. Letting your slide deck be a crutch. Too often, presenters [believe they can] eliminate preparation time by leaning on their slides. They create slide after slide of laundry lists in bullet point format, believing the material on-screen will keep them both organized and versed in the workshop content. However, such laundry lists are presentation killers, as audiences neither want to read the entire content, nor do they want to observe the presenter doing so.

2. Reading your slides, word for word, bullet point by bullet point. This jeopardizes your credibility, and it egregiously ignores critical learning-style theory, namely that most students cannot both read and listen to the speaker. Moreover, by reading or excessively referring to the slides, the presenter is starving the audience of the very thing they crave most: eye contact!

3. Overusing the almighty bullet point. Ultimately, slides anchored by an endless column of bullet points will evoke such varied audience reactions ranging from bored eye rolls to screams of terror and desperate evacuation from the classroom [author exaggeration]. Rarely will the offending black dot—or what follows it—open a wellspring of excitement or enthusiasm within the audience. In other words, people have no further tolerance for bullet points.

4. Delivering massive volumes of data plastered across every bit of useable slide space. When text is so dense that the slide font is smaller than the lettering on a business card, then the point of a slideshow—to capture attention, to entertain, to educate—has been missed entirely. This unfortunate tactic also fits the critique above, namely that the audience and presenter spend their time reading slides and neither is communicating with the other.

Here are 3 concise tips—totally free of bullet points—to help you create a dynamic, interesting slideshow and to avoid having your audience sprinting for the nearest exit:

Do: Use BIG fonts, few words, and interesting graphics that coincide with your speech. If you are using a preexisting slide deck, hide cluttered slides and/or regularly press “B” while presenting to blacken the screen. This will shift the students’ eyes from the screen to you. (Press any button to resume the slideshow.)

Do: Keep slides concise and distribute handouts – especially when conducting training that requires the dissemination of significant quantities of information.

Do: Rehearse your presentation so many times that you rarely need to glance at the slides and, instead, may spend the majority of time focusing on your audience.

Stay tuned for a follow-up blog post discussing a simple process to build a presentation from inspiration to delivery. Until then, use the comment block below to share your feedback.

What are some of the best and worst presentations you ever witnessed? What made them memorable?

Guest Contributor: David Kershberg, AFC

July 03, 2018

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#FridayFollow – Inspiring financial capability through the universal language of Hip Hop

Rachael Deleon — Fri, 18 May 2018 14:34:22 +0000

Pamela Capalad, a Certified Financial Planner and Accredited Financial Counselor^®, is a fee-only financial planner whose business is called Brunch & Budget. Why brunch, you might ask? Pam says that, “brunch gives us the space to have real, open, and vulnerable conversations. It’s about getting to the heart of why we’re sitting across the table in the first place – To help you find the path to live the life you want to live. Let’s get there together.”

She is also the cohost of a weekly podcast and personal finance & racial economic inclusion with Brian ‘Dyalekt’ Kushner.

But her organization, Pockets Change, that she co-founded with Andrea Ferrero, is really what started it all. Pockets Change provides Hip Hop + Finance workshops for youth (from age 5 to college age).

What inspired you to enter this field?

Pam: When I was in college, I took a summer job teaching financial literacy camps for kids and those three summers completely changed my life. Why didn’t I get this information when I was 12? Or now that I’m in college and managing money for the first time ever?? I finished with a literature degree and this overwhelming feeling that I needed to enter the financial field instead. I saw the impact we were able to make with kids in just a week and I knew I had to figure out how to get this information into the hands of more people so along with Andrea, who also taught camps for a summer, we founded Pockets Change.

Tell us about your hip hop and finance program for kids and teens and how you are not only bridging gaps, but really meeting people where they are.

Andrea: A big part of “meeting people where they are” is moving away from the traditional approach of teaching facts, figures and formulas. We’re focused on developing habits, strategies and mindset for navigating financial decision making. That’s where the combination of Hip Hop and Finance comes in. We work together to explore finding your Pocket – your personal rhythm and connection to community. Finding that rhythm isn’t about learning a compound interest rap rather it’s about creating a cypher, a space where learners of all ages can identify, examine and share their personal strengths and relationship with money. By making finance more personal, kids and teens look at budgeting from a place of personal prioritization, earning as an extension of personal interests and goals, and financial systems as relationships where they can advocate for themselves.

We love your creativity and innovation – from your business model to your programming? What’s next up? What’s got you most excited?

Andrea: From here we’re going to keep changing the way finance is taught! We’ve enjoyed traveling to incredible community partners across the country sharing student workshop series, professional development workshops, and our online curriculum. We’re excited to expand that community of partners, working with K-12 schools, colleges, universities, government agencies and nonprofits to talk about money and how we can build financial capability in our communities. As part of that community building we’ve been selected as Mozilla Open Leaders, leading a project on the development of financial self-assessment tools.

Pamela Answers our Friday 5

My Why: To do my part to help close the racial wealth divide and educate people not only in personal finance, but on how to see their finances in the context of the bigger picture and system
My Favorite Quote: “Money is always there, just the Pockets Change. It’s not in the same pockets after a change.” – Gertrude Stein

My Hero (who inspires you): Saundra Davis founder of Sage Financial Solutions, and Lillian Singh director of the Racial Wealth Divide Initiative at Prosperity Now – I want to be them when I grow up!

My Favorite Personal Finance Resource: Carl Richards is one of my fave NYT columnists

My best advice:
1. For someone starting the journey to financial well-ness: Where you spend your money is a representation of what you value – indulge in the things you value, ignore the rest.
2. For a new professional entering this field: Get certified in something! It’s not about letters after your name, it’s about doing right by the clients who are counting on you to help them with their livelihoods. Take that seriously enough to be held accountable for your advice. If there’s one designation you’re going to start with, start with the AFC^®. I’m not just saying that, I got my CFP first and if you want to work with folks who need this information and help the most, the AFC^® covers the knowledge base and the behavioral/psychological training you’ll need to help people truly make change.

Follow the work of the Brunch & Budget team at:
Website: brunchanbudget.com, pocketschange.com
Twitter: @brunchandbudget @pocketschange
Instagram: @brunchandbudget @pocketschange
FaceBook: /brunchandbudget /pocketschange

May 18, 2018

Interview with Pamela Capalad, CFP®, AFC® and her co-founder of Pockets Change, Andrea Ferrero

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Investor Education & Protection: Starting The Critical Conversation about Retirement in Your Community

Rachael Deleon — Wed, 25 Oct 2017 16:08:00 +0000

Did you know that:

17% of Ohioans reported that over the past year, their household spent more than their income*
27% of Ohioans reported having medical bills past due*
Nearly 60% of Ohioans do not have an emergency fund to cover three months, which means that individuals who are not balancing monthly income and expenses are not saving and may be struggling to make ends meet.*
31% of Ohioans reported using one or more non-bank borrowing methods, such as payday loans, in the past five years.*
Only 2 in 5 Ohioans have a financial plan because of a lack of knowledge, low wages, or a lack of trust in the profession.**

While these statistics are specific to Ohioans, we know that the trend is consistent, and sometimes even worse, in states throughout the country.

In May, AFCPE launched the “Building the Bridge to Ohio Investor Education Program” in collaboration with the Ohio Department of Commerce – Division of Securities, the Investor Protection Trust (IPT), and Detroit Public Television (DPTV) – to bring together a network of professionals, organizations, and resources to build a more effective continuum of care at the local level. The statewide campaign featured the airing on Ohio public television stations of the DPTV documentary “When I’m 65,” three community events (Columbus in May, Cleveland in July, and Cincinnati/Dayton in September) and pro bono financial counseling and planning. When I’m 65 is a groundbreaking national documentary and engagement program focusing on the realities of retirement in the 21st century and the financial choices that all Americans need to make to plan for a financially secure future:www.wi65.org.

Participants in the three-city event, reported the events to be an invaluable opportunity to engage with experts, learn new information, and gain new resources to use in professional work or to improve personal financial well-being. As part of the program, we designed a community discussion guide to help more individuals, families and communities begin talking about money, addressing the barriers and opportunities to retirement planning, and connect more people to trusted resources. In addition, we created a model that can be replicated in other states to address the lack of financial literacy across the nation.

As an organization, AFCPE is dedicated to building the bridge to a more comprehensive and integrated continuum of care for financial services to ensure that all people – regardless of age, income or background – can plan for a secure future.

So what can you do to help?

Facilitate the Conversation! Download our discussion guide to host a When I’m 65 screening in your community. We make the process easy – outlining what you need, how to prepare, and discussion questions to ask to drive conversation and a call to action. This guide can be used in an informal setting with friends, family, or neighbors, or in a financial education setting through your organization.

Bring the Program to Your State. If you are interested in bringing this program to your state, please contact me at rwiggins@afcpe.org.

*2015 FINRA National Financial Capability Study
**AFCPE 2017 Ohio Consumer Survey

October 25, 2017

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Starting A Client Conversation: It Doesn’t Begin with Finance

Rachael Deleon — Tue, 17 Oct 2017 14:56:34 +0000

Personal financial can be a touchy issue for many individuals.

Consider this scenario: A client makes an appointment for a financial-planning consultation. As an Accredited Financial Counselor (AFC^®), you ensure the client that you do not endorse, sell or promote any financial product line. Yet, even with this disclaimer, your client still appears edgy and somewhat uncomfortable. Why? What’s going on? You also advised your client that they would be wise to add an emergency fund to their overall financial plan portfolio. What’s the harm in that? You said, “emergency fund” but what your client likely heard was “no more restaurant dinners out.”

The takeaway for the professional is to see and hear the Whole Person. Upon meeting your client, begin to understand their perspectives of working with a financial professional. Have their prior experiences been pleasant? Take into account that, you as an advisor, may also be representative of the greater financial industry. Generally, medical and legal professionals, administrators and public officials, and other financial consultants have planted the seeds of success (or failure) with regard to the client’s first impression of you. When meeting with a client for the firsts time, I picture myself as a pediatric dentist meeting with a pre-school patient for his very first dentist appointment. Am I going to begin the appointment with the benefits of a therapeutic root-scaling? No…I’m going to ask the child about her favorite book or toy.

Upon approaching or being approached by a candidate for advisory services, be professional and cordial. Yet subconsciously, tap into the hidden or possible barriers to client trust. Even for clients who are business-like and broadcast their disdain for “small talk”, I ensure you that the interaction will have a greater chance for success if you do not start the conversation with Finance.

Essential elements of relationship-building and dismantling communication barriers include:

Bringing attention to areas of commonality (sports, similar tastes in music, etc.)
Non-judgmental probing (what is your opinion of Tech Stocks?)
Humor (the good, clean, and relevant kind)
Unconditional acceptance (Yes, I know, the cost of living has skyrocketed)
Being aware of posture (Are my arms folded…am I looking at the clock?)

Uneasiness is especially prevalent in individuals who come to us due to a financial loss or need of immediate advisement. Some clients may even equate asking for help or advice as a sign of failure. By putting ourselves “in their shoes,” we open our perspective and create a gateway to a successful client financial counseling interaction.

As AFC^® professionals, we understand and practice the relationship-building process:

Engage and understand the client’s issue.
Establish trust.
Provide appropriate and alternative client-centered solutions.

Remember these three guidelines and start your initial conversation by NOT talking about finance. I think you’ll discover, as have I, that this approach is a highly effective strategy for client engagement, effective resolution and efficacy.

Guest Contributor: Andre Milteer, AFC^®

October 17, 2016

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It’s Time to Break out the Blender!

Rachael Deleon — Tue, 11 Jul 2017 14:49:36 +0000

There is a big change coming for the men and women serving in our armed forces, and it has the potential tosignificantly impact how they save and plan for retirement. This change is known as the Blended Retirement System or BRS. Beginning in January 2018, eligible service members, currently serving in any branch of the military, will have the option to sign up for the new BRS. This choice is available to service members serving on active duty as well as those serving in the National Guard and Reserves.

Under the current system, a service member has the option to contribute funds into a Thrift Savings Plan (TSP) to supplement and save for retirement. Once the service member serves 20 years then he or she is eligible for a monthly pension check that is equivalent to 50% of his/her monthly base pay. Under the current system, the government does not offer a match on funds contributed to the TSP. This will change if a service member opts into the BRS.

Currently, many service members do not serve long enough to be eligible for a full pension. These service membersleave the military with only what they put into their TSP, and in many cases far less, if they elected not to participate or were unaware of the program. There is education about retirement during basic training, but service members are on information overload and don’t always process what is being taught.

As a result, the government decided to implement a matching component to the TSP. If a service member hasserved 12 years or less or have less than 4320 points (on the reserve and guard side), then they may be eligible toopt-in. In January 2018, qualified service members will be notified through their branch pay site. How the match will work and how it could benefit service members in the long run:

1) A service member opts into the BRS and receives an automatic 1% contribution into a TSP account.

2) The service member chooses to contribute some of his or her funds to the account- the government will match up to 4% plus add in the 1%. This gives a total of up to 5% that the government will contribute on top of his or her contribution.

3) The service member is vested from day one if they have already been serving for two years. If not they willbe vested at the two-year mark. New service members, who begin their time of service after January 1^st2018, will be automatically enrolled in the new system, will begin receiving government contributions after 60 days, and will be vested after two years.

The best part of the new system is that if service members do not serve a complete 20 years, they are still able to take all contributed funds with them when they leave service, much like a 401K in the civilian world. The trade-off is a reduction in pension. With the new system, the government will reduce the amount of pension a service member receives after 20 years of service from 50% to 40%. The service member will still receive a pension if eligible, but at a reduced rate.

Because there are many things to consider, it is imperative that service members receive as much education as possible around the new system. Once a service member makes the choice to opt in, that decision is irrevocable.

There are Personal Financial Counselor’s (PFCs) strategically placed all across the country whose primary purpose is to help support the service members of today’s military and educate them. If you know of service members who need some assistance with making this very important decision, please refer them to a PFC in their area, encourage them to take the online course being offered through the military, and direct them to visithttp://www.militaryonesource.mil/news/1/2016/october?content_id=293958 .

Guest Contributor: Susan Pascoe, AFC^®

July 11, 2017
Let’s Talk Blended Retirement

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A Penny for Your Savings

Rachael Deleon — Wed, 18 Jan 2017 15:34:58 +0000

Does a penny really amount to much in today’s American society? While stationed overseas, my family learned to live without pennies because they were not accepted at the facilities on base. They would round everything to the nearest $.05. Combining that with digital and electronic methods of keeping track of finances, one might argue that a penny is no longer worth a second thought.

A report done by The U.S. Government Accountability Office in December of 2015 details the cost to make all U.S. coins and noted that it actually costs $.017 to make a penny. The cost to make a penny actually exceeds its worth, making it a seemingly unnecessary waste of American dollars. The counter argument, on the other hand, is that the penny ensures that stores cannot round prices up to the $.05 and raise prices on goods and services. However, countries like Sweden, New Zealand, Australia, and Canada have gotten rid of their lowest cent coins and have not had economic ruin ensue. So, the debate continues . . . but what does that mean for your household?

My youngest child has recently taken to snatching up every penny she finds on the ground. This got me thinking about the value of the penny, and how we might use it as a catalyst to teach younger children financial lessons. Here are a few ideas to encourage our children to value every penny, and maybe renew our own perceived value in just one cent.

1.) Match their find. We teach our clients to put as much as they can afford into matching investment programs. Try matching each penny your child finds to show them that a small investment can add up over time.

2.) Help them set a goal for a purchase. First, have your child look for something they want. Then using a container like a piggy bank, a cup or a jar, have them save to afford that item. The visible accumulation of pennies and coins over time helps teach them the value of waiting to afford purchases. It will also help teach them that each penny counts towards the goal.

3.) Teach them to give. Each time you match your child’s found penny, I encourage you to give them another penny for a designated “giving jar”. Set aside a jar where those extra pennies can accumulate toward a charitable donation of their choice. My children like to give to missionaries at our church. Allowing your kids to give to the panhandlers on the side of the street, or to a local organization, teaches them the importance of being charitable, and letting them decide on the recipient of their generosity allows them to connect with those in need.

While a penny may not seem like much, it can be a powerful tool to teach valuable financial education lessons – while not breaking your own bank. Teach your children the value of every penny and the impact that each cent makes toward a financially secure future. And don’t limit yourself to the penny! If you are willing, use these same tools for nickels, dimes, quarters, and even dollars. The lessons your child might gleam are worth every cent.

Guest Contributor: Ester Johnson, AFC^®

January 18, 2017

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The Challenge: Creating Visuals for Financial Concepts

Rachael Deleon — Mon, 19 Dec 2016 15:38:13 +0000

When you teach financial concepts, how do you help your clients or audience understand the concept? While it’s simple to teach that 2 + 2 = 4, it can be harder to help people comprehend the time value of money, opportunity cost, or longevity as it relates to retirement planning. For people to use these concepts, we must go beyond defining the concept and help people “get” the concepts so they can act on them.

Although different people learn differently, we still typically rely on verbal education. However, translating our words to visual demonstrations is immediately rewarding. In fact, if you think back to elementary school, we learned to add 2 + 2 by using manipulatives like little blocks.

As a University of Illinois Extension educator, I typically teach people in community settings, so my audiences range from elementary students to senior citizens. I believe that all ages benefit by understanding concepts like compounding returns. (You should hear the third graders squeal in delight when they learn that they will have more money after earning a return in their savings accounts!) In the last few years, I’ve been incorporating visual examples when explaining financial concepts. No more time value of money formulas like the uniform series compound amount in my presentation notes!

So if I’m not teaching eye glazing-inducing formulas, how can the time value of money be demonstrated? Well, I’ve found that pulling out a $100 bill wakes up the audience! Then I can talk about what happens when you deposit $100 in an account that provides a compounding return. I demonstrate this by adding coins and currency (representing annual growth) on top of the $100 bill. Using 5% interest compounded annually,

For Year 1, I place a $5 bill on top of the $100 bill;
Year 2, $5 and a quarter;
Year 3, $5 and two quarters and a penny (now people can see that interest was earned on last year’s interest);
Year 4, $5.79 added; and
Year 5, a $5 bill, $1 bill and 8 cents in change! A total of $127.63 saved.

While the money pile grows, I see people nodding as the concept starts to make sense to them.

When my colleagues and I began revising the All My Money curriculum, we were determined to make the financial concepts real to our limited-resource audience. Not being able to provide a $100 bill in each of the new All My Money: Change for the Better resource boxes, we created a new visual using pony beads instead of real money. In the story that goes along with our demonstration, Shanelle and Javier both decide to save $20 each week; however, Javier saves his money under his bed while Shanelle receives 5% return on her investment account. Well, as I’m sure you can imagine, Shanelle ends up with many more beads on her beaded string than Javier does after five years of saving. No long lectures needed to “get” this concept!

I was very excited when Dr. Ted Klontz demonstrated longevity at the AFCPE 2016 Symposium using a cloth measuring tape and a pair of scissors. A visual demonstration to take home and use with my audiences when talking about retirement planning! If you weren’t able to hear his presentation at the Symposium, it’s available on the AFCPE website.

What visuals do you currently use when teaching financial concepts? My New Year’s resolution is to create new visuals to help my audiences. I would love to hear your ideas too.

Guest Contributer: Kathy Sweedler, University of Illinois Extension Educator
sweedler@illinois.edu; (217) 333-7672

December 19, 2016

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