Financial Lessons From a Chess Board

March 31, 2017

I don’t always watch 60 Minutes anymore, but when I do, I am reminded that I have liked it since I was a kid. That brings up a few points. First, the show has been on a very long time! Second, I was a weird kid – watching 60 Minutes while my neighborhood friends rode their bikes. I’d join them before and after so it’s not like I wasn’t social too…just nerdy.

In a recent episode, there was a story about a man teaching chess to kids in Mississippi. Google “60 Minutes chess” and watch the quick story. Here’s a quick synopsis of the segment. What I found fascinating is that while he’s teaching the kids to play chess, he is actually teaching them about far more than that. He’s teaching incredibly valuable life lessons.

I have some odd thoughts on parenting, but I’ve summed it up this way: If I teach my kids how to win with class, lose with grace and think through a decision making process, I’ll feel like I’ve prepared them for the real world. That’s a part of what he is teaching these kids.

Chess, like life, requires patience and constant learning in order to succeed. They kids, like all of us, learn more from their losses than their wins. For them, this is because they review the losses for what they could have done better. The sting of a loss is a great teaching tool.

In a way, conversations about money can have that flavor too. I’ve talked with a lot of people who start their conversations with me by saying “I’m lousy with money” or “I’ve made a lot of mistakes in my financial life.”   The good news is that they recognize that they could have done things differently. The downside is that they haven’t worked with anyone, like a coach, who has been able to help them review their mistakes and provide suggestions for ways to improve based on those losses.

When I hear conversations start that way, I immediately stop the conversation and tell people that they are no longer allowed to speak negatively about their financial skills. I ask if they were handed a violin and put on stage with the New York Symphony, if they’d do well or if they’d fare well in a chess match against Bobby Fisher (for those with great memories) or Magnus Carlsen (for a more current reference) if they have never played before. The answer is a universal “NO.” Those are skills that are honed over a lifetime of practicing and learning.

Managing your personal finances is way easier than mastering chess or the violin so it won’t require nearly as much effort or skill. In fact, it’s relatively simple to become a financial success. There have been years worth of blog posts in this space giving little tips about how to become financially well/secure. I’ll close by summing up several years of posts in a few bullet points:

  • Spend less than you take home.
  • Save 15-20% of your income for retirement.
  • Have a healthy emergency fund. (Start with $1,000, get to $2,500, and then get to 6-9 months of expenses over the course of time.)
  • Pay attention to where you spend money. No one will care about your money as much as you, so guard every dollar that you work hard to earn.
  • When you mess up, which we all do, figure out why. Learn from it and don’t repeat it.

 

 

 

How to Teach Financial Adulthood

September 12, 2016

Sex education is required in public schools – and financial education should be as well, wrote CNN journalist Heather Long in a popular article recently. “The American Dream isn’t possible without understanding how to save, invest and use debt wisely,” she noted, “Yet we mostly leave it up to people to figure what to do with their money on their own.” Certainly anyone who’s tried to figure out what health insurance plan is best for them, is struggling with paying off student loans or saving for retirement, or tried to decipher the fine print of a credit card disclosure can attest that they were less than ideally prepared for the labyrinth of modern financial decisions.

While Long isn’t the first person to write about this important issue, the fact that she conflated money and sex ed helps raise the profile of an essential debate. Whose responsibility is it to provide financial education – schools, parents or both? What are the essential financial skills needed for adulthood?

Long writes that, “The reality is rich kids tend to be a lot more financially literate than working class kids. Wealthy kids learn about money at home — or at their private schools. Poor kids do not. It’s yet another reminder why the “friends and family” plan to learn about money is so flawed.”

I think she’s painted way too rosy of a picture. Most Americans, regardless of economic status, feel underprepared to navigate the complexity of financial responsibilities they must shoulder in the 21st century economy. As a nation, we are still a long way from having some kind of uniform financial education that builds financial capability and prepares kids for the economic realities of adulthood. The Common Core state standards adopted by 42 states do not specifically incorporate financial literacy (although certain math standards do have practical applications).

If you’ve got kids, you cannot afford to wait while society tries to figure this out in terms of public policy. The financial and economic world is only becoming more complex. What can parents do right now to promote financial education at school at and home?

Understand what it means to be financially literate

The non-profit Council for Economic Education has developed National Standards for Financial Literacy, a framework for teaching personal finance in kindergarten through 12th grade. The idea is that a young adult who has mastered these elements has a much better chance of making solid decisions about money and to understand the trade-offs between different choices they will face in their financial lives. The standards cover the basics of:

  • Earning Income
  • Buying Goods and Services
  • Using Credit
  • Saving
  • Financial Investing
  • Protecting and Insuring

The CEE has created lessons teachers can use in the classroom. However, you don’t have to be a classroom teacher to benefit from reading and understanding these standards. Parents can download the standards here and use them as a guide for evaluating your children’s financial capabilities and pinpointing where they could use some extra learning opportunities. Additionally, share them with your school principal and your children’s teachers, including the CEE’s suggestions on learning exercises by grade, which correspond to Common Core standards for language arts and math.

Chances are, if you are reading a financial wellness blog, you already have a good handle on the six categories contained in the standards. However, if you find that some are trouble spots for you, consider putting some attention into improving your own financial literacy. The best place to start is your employer, which may have a workplace financial wellness and/or retirement planning education program that you can participate in with workshops, webcasts, online resources and/or one-on-one coaching. There has never been a better time in history to be a student of personal finance. Free resources are everywhere, including helpful personal finance education sites like the AICPA’s Feed the Pig, FINRA’s The Alert Investor and the Khan Academy, just to name a few.

Don’t assume school-based financial education is enough

According to the CEE’s 2016 Survey of the States, only 17 of 50 states have mandated personal financial education courses for high school students, and only 5 of them require at least a semester of personal finance basics. That’s not nearly enough. Entering adulthood without adequate financial education can often lead to unwanted debt and overwhelming financial stress. According to Financial Finesse’s 2016 Financial Stress Research, 85 percent of employees surveyed reported some level of financial stress, and one in four (25 percent) reported experiencing unmanageable (high or overwhelming) financial stress levels.

Just like with sex education, the best way to communicate financial information to your children is to share your values in an age-appropriate way. This is something that should happen throughout your child’s growing up years. Be open about the financial decisions you make every day and spend time as a family talking about money and the economy. As a basic guide, try New York Times’ columnist Ron Lieber’s book about raising financially savvy kids, The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous and Smart About Money. There are also many online resources with age-appropriate personal financial games and lessons, such as kids.gov, the Consumer Financial Protection Bureau’s Money As You Grow and practicalmoneyskills.com.

Does your school district have a financial education program? If yes, what do you think of it? Email me at [email protected] or follow me on Twitter @cynthiameyer_FF.

 

Why I Do What I Do

August 12, 2016

As my kids and friends are far too familiar with, I’m a bit of a news and political junkie. That’s why it’s so surprising to everyone I’ve shared this with that I didn’t watch a single minute of either the Republican or Democrat conventions this year. I saw some “highlights” the next day on the news and heard people talking about highs and lows from each convention (depending on which side of the aisle they most consider their political home). I just couldn’t do it this year.

So many people that I talk with (and judging by the scroll on my Facebook home page, most of America) will be upset with our next President regardless of who wins. Both candidates from the major parties have greater than 50% negative ratings. A recent poll had Clinton disliked by 55% of voters and Trump disliked by 63% so either way we slice it, over half of the country will be unhappy on the day after Election Day. The overwhelming sentiment on my Facebook scroll is “THIS is the best we can do???”

One of the other areas of life where there is overwhelming agreement that we need to do better is in the world of banking and financial services. There is a lot of distrust of the big banks. Wall Street is unpopular with Main Street and criminals like Bernie Madoff give the financial advisory world a big fat black eye. When I look at the world through the political lens right now or through the lens of how most of America feels about the overall financial industry (painting with a very broad brush here), it’s easy to feel like there isn’t much positive to hang on to. But then I get up every morning and do what I do for a living, and my soul gets restored. Here’s why:

I’ve spent the last 3 weeks on the road and have spent only a sparse few nights in my own bed in the month of July. I’ve been at our client company sites and at our home office in California for some internal meetings on how we can do what we do better.  While the travel and hotel beds had me a bit out of my workout rhythm, I’ve been able to meet dozens of individuals in one-on-one settings at their employer and talk about their lives.

I wasn’t there to sell them anything, manage their money, or offer them a loan. I was there simply to talk to them, hear their story and suggest a few ways that they can get closer to their goals. Some have been in great shape financially, others on the verge of disaster. But the thread that weaves them all together is that they were all in search of progress.

In the last several weeks, I’ve heard about engagements that are about to happen (before the future fiancée is in the loop!) and have recently happened, weddings, births, job changes, promotions, significant pay increases, and happy retirement decisions. I’ve also heard about massive credit card debt, huge student loan burdens, ugly divorces, and layoffs. It’s been a time of highs and lows emotionally.

Regardless of the issue, it appeared to me that each person I met was truly happy that their employer offered a financial wellness benefit. The feedback I’ve gotten via email has made me realize how much they valued a person who was there to help them and not sell them anything. It’s also made me realize that I am doing exactly what I was meant to do. The ability to help people, see them change their lives for the better and be there along the way to coach them as they hit speed bumps is about as close to perfection in a role that I’ll ever find.

I usually like to close out a blog post with a bit of a financial lesson, so I’ll give you this: At different times in our lives, we are going to need help. Knowing where to go for that help before it’s a crisis situation can be incredibly valuable.

Line up your experts and trusted advisors now. If you don’t have access to a financial wellness program at your employer, ask them to investigate one. If you don’t have someone that you can trust to help you reach your goals and coach you along the way without their interests coming before yours, ask your family, friends and colleagues if they do. You can also search for a financial advisor through the CFP(R) Board, and here are some questions you can ask any prospective planner. Most importantly, find someone who loves what they do for the right reasons.

 

 

 

One Great Reason to Be Optimistic About Millennials and Money

June 06, 2016

Can millennials avoid the financial mistakes of the baby boomers, like not saving enough for retirement and taking on high consumer debt? Our recent 2016 generational research report shows there are some reasons for optimism. For a first-hand account of why, I didn’t have to look any farther than Financial Finesse’s own Maneeza Hasan, our marketing manager.

Maneeza is 29 and single and recently rented her own apartment in the LA area after living overseas for a few years. She paid off her student loans early, has an emergency fund, and has made good progress in her retirement savings. Maneeza has certainly got it together more than I did when I was her age. Here’s what she told me when we sat down to talk about her financial life:

What do employers need to know about what is important to millennials?

Millennials have gone through one of the most brutal recessions in history. They desperately want to have financial stability so they can start having families, investments, houses, and more. Helping them get out of student loan debt and paying them a great salary would keep millennials at the job. Otherwise, there are a ton of other ways to make money these days, and millennials will take on all of them if that would result in the stability they are seeking.

What are the biggest financial challenges that people your age face?

I think getting a financially stable job that is enough to provide a good life is the biggest challenge. It’s very easy for millennials to be “underemployed”, and this causes a lot of necessities and luxuries to go out the window. In addition, most people get into serious levels of student loan debt trying to acquire this stable income.

When you got out of college and started working, did you feel prepared to deal with all your financial challenges? What do you wish you had known?

I was fortunate in finding a very well-paying job (even though I had to move halfway across the world to find it) right out of college. This allowed me to take care of everything (student loans, savings, traveling, etc.) very easily. I wish I had known more about taxes before I graduated. I feel like I never got any real education on how taxes work.

What’s more important to you personally, enjoying life now or saving for the future?

Saving for the future. Enjoying life now happens regardless due to birthday parties, holidays, etc. with friends and family. For me, my savings are the only thing that will help me level up into a better and better life.

Do you want to own your own home? If yes, when would you like to buy?

I would like to own my own home, but I’m wary of being tied down. The world is constantly changing these days, and it is scary to sign up for a 30 year loan. I’d pretty much just want to do it if it was a really good investment. Ideally, I’d want to buy a home once I was married, but if I was stable enough to do it on my own, I would.

How does being multilingual and multicultural influence your financial decisions?

Well, growing up in New Delhi for the first 7 years of my life exposed me to a lot of dire poverty. My family wasn’t poor, but you can see it every day in the city. Being an immigrant to ambitious parents taught me to sacrifice a lot and do what needs to get done to reach that next goal, so I’ve been raised to save, save, save.

Ironically, this saving/investing mentality has resulted in incredible experiences. Living and visiting so many countries has given me a great perspective on the financial reality most people in this world face. That keeps me humble and focused on spending my money on the things that are really important.

If the blog authors could speak directly to people in your generation, what should they say?

Just really help them develop a good game plan for gaining that stability. Most people come up with some really bad ideas that they end up having to pay for years and years. Find low cost ways to get a good job or job training, go to college, etc. Also, be patient when it comes to having their own place, marriage, kids, and helping out family.

Most people want to do these things before they are financially ready. Share basic knowledge like Roth IRAs (I’m a big fan), high interest checking/savings accounts, cheaper options for TV/Internet. Great blog posts can help get them in that mentality of looking for the next financial “hack” until it becomes a habit and a natural part of their lifestyle.

What is the biggest mistake you see twenty-somethings make with their money?

I don’t see them focused on their finances in general. Some think money is just a bad thing, and some just don’t prioritize it. They just live on what they earn and focus on other aspects of their lives. Having an “investor” mentality would make a huge difference in their lives and set them up for their thirties very well.

Do you agree with Maneeza’s assessment of millennials? Email me your comments at [email protected]. You can also follow me on Twitter @cynthiameyer_FF.

 

 

Are You Lip Syncing Through Your Financial Life?

February 05, 2016

I’ve recently become a huge fan of the show Lip Sync Battle. Seeing celebrities “sing” the hits of their favorite artists while doing some very entertaining dances is absolutely hilarious. While it’s one of my guilty pleasures and has led to some world class laughter (“The Rock” as Taylor Swift, Anne Hathaway as Miley Cyrus, Channing Tatum vs. Jenna Dewan Tatum), in one of my odd “connect the dots” moments, I realized that I was having a conversation with someone who was lip syncing her life. Continue reading “Are You Lip Syncing Through Your Financial Life?”

Do You Still Believe These Financial Fairy Tales?

October 23, 2015

I was talking with one of my friends about a recent experience she had while watching a movie that is a twist on an old Disney fairy tale. It made her question some of the “financial fairy tales” that she believed, based on her life experience. Here’s her story: Continue reading “Do You Still Believe These Financial Fairy Tales?”

Financial Education, Literacy, or Wellness?

May 15, 2015

I was talking with a friend recently who is a big fan of words and language, which could explain the presence of more bookshelves in her house than I’ve ever seen in anyone else’s house. We started talking about the language and words involved in my role at Financial Finesse. I’ve noticed an evolution in terminology during my 5 years here. There have been three terms that have been used a lot by our employees, our clients and in the general corporate environment. I see the terms evolving in the corporate workplace and a few members of our financial planning team discussed the evolution recently and found that the evolution of the terms aligns with the evolution in the way people process information. Continue reading “Financial Education, Literacy, or Wellness?”

Why You Need to Talk to Your Kids About Money

May 01, 2015

I know that many people are hesitant to discuss money with their children — or their spouses/partners for that matter. I have talked about this with one of my pastors and he told me that people will come to him for help with all sorts of issues ranging from drug abuse to infidelity in a marriage, but money issues still remain a taboo topic for a lot of people. Many parents are embarrassed by their past money mistakes and do not want to discuss these with their children.

Continue reading “Why You Need to Talk to Your Kids About Money”

How To Overcome Financial Avoidance

February 23, 2015

I have had the privilege to work with so many incredible people throughout my career as a financial planning professional. Imagine having the opportunity to listen to people as they share their unique life stories, talk about current challenges, and explore future life goals. Money is a powerful force in our lives and how we choose to use it is up to each individual. What’s even more amazing to me is the fact that the topic of money is not something that everyone is comfortable talking to others about. But sometimes the type of person that needs the most financial guidance is also one of the most challenging groups of people to actually get in front of – these are the money avoiders. Continue reading “How To Overcome Financial Avoidance”

Lessons From a Veteran to Today’s Soldiers

November 11, 2014

If someone were to ask me what I am the most proud of, next to my husband and daughter, I would say that I am the most proud of serving in the military. The military is where I developed a strong work ethic. I also learned to think of others before myself and I learned to lead even though I may not have had all of the answers. I enjoyed every crazy moment in the military (well, if I am honest, the port-a-potties were not fun, yuck!) and I grew close to many of the servicemen. Continue reading “Lessons From a Veteran to Today’s Soldiers”

Be the Pilot, Not the Engineer

October 24, 2014

One of my colleagues is hopelessly stuck in the years BC (“before children” as he explains) with his cultural references. He made a reference to the movie “Airplane” (acting as if it were a relatively new movie) and as we discussed the absurd premise of the movie, he made an interesting observation. “If I had to fly a plane, I’d rather be getting directions from a pilot than the engineer who built the plane.”  His point was that a pilot knows how to focus on what is necessary to keep the plane flying whereas the engineer may get bogged down in the details of how the plane works.  That’s how far too many people feel about their financial lives after they attend a class or read a book about finances.  Continue reading “Be the Pilot, Not the Engineer”

Should You Use a Fee-Only Advisor?

October 02, 2014

Last week, we discussed the dangers of using  a commissioned-based financial advisor. One way to avoid those conflicts of interest is to work with a fee-only (not fee-based, which is fees PLUS commissions) advisor. Instead of selling investments for a commission, they typically charge a fee that’s a percentage of the assets they manage for you. You can search for a fee-only advisor through NAPFA, the National Association of Personal Financial Advisors. Continue reading “Should You Use a Fee-Only Advisor?”

Enjoy Labor Day and Put Your Benefits to Work for You

September 01, 2014

Labor Day weekend is always an enjoyable time in our family’s household as we usually try to get in a trip to the beach, have a cookout, and welcome in the college football season (which is a pretty big deal in our part of the world). Hopefully you and your friends and family have been able to work some fun into the schedule over the long weekend. (If you had to actually clock in at work today, be sure to find some time for rest and relaxation soon to make up for working on the federal holiday.) Continue reading “Enjoy Labor Day and Put Your Benefits to Work for You”

Put Your Financial Knowledge to the Test

April 28, 2014

Did you know that the entire month of April has been designated Financial Literacy Month? The month may be coming to an end soon but that doesn’t mean that the quest to improve our own financial knowledge should ever stop. As the financial world appears to get more and more complex, the concept of financial literacy becomes increasingly important when it comes to making decisions about money. Here are some assessments you can use to test your own financial literacy: Continue reading “Put Your Financial Knowledge to the Test”

What is a Financial Educator?

December 05, 2013

A few weeks ago, I wrote about my journey towards a career in financial education. But now whenever people ask me what I do, I always prepare for a longer conversation than if I were to say I’m a lawyer or I work for Google. If I say I’m a financial planner, people assume I’m selling something. If I say I’m a financial educator, people assume I teach at a school or university. To understand financial education, let’s take a look at how it relates to financial media, sales, and advice since I have some experience with each of them: Continue reading “What is a Financial Educator?”

Why I Gave Up My Securities Licenses

November 01, 2013

One of the things I wrestled with prior to making the decision to join Financial Finesse was the fact that they wanted, no….REQUIRED, that I give up my securities licenses. I had studied HARD to pass the Series 7, 63, 65, 24, 8, and 31 at various points along my path. I had to give serious thought to this particular decision. Continue reading “Why I Gave Up My Securities Licenses”

How I Became a Financial Educator

October 10, 2013

For the past week, each of us has been writing about our careers as financial educators and how we got here. My interest in personal finance started at a really young age when my father, who was a stockbroker at the time, gave me the “Dean Witter Guide to Personal Investing” in the 4th grade and I actually read it. (Linda, you’re not the only finance geek.) I can’t say that I understood all of it but I got the importance of saving as much of my measly allowance as I could and starting the magic of compound interest as early as possible. Continue reading “How I Became a Financial Educator”

My Second Career as a Financial Educator

October 09, 2013

If you would have told me in 1994 that I could make a living helping people with their finances without the pressure to sell financial products, I would have thought you were joking. Back then, there was a certain esteem associated with financial professionals, and as the stock market began to rise to records levels, the idea of NOT being an investment sales professional seemed silly. So attractive was the prospect of being successful as a financial advisor that I left my first job as a 401(k) enroller after six years to pursue a life as a personal financial advisor. Continue reading “My Second Career as a Financial Educator”

Yes, I’m A Finance Geek

October 08, 2013

I’ve just returned from a girl’s weekend vacation with a group of 5 friends who I have known for ages, a few going back as far as elementary school.  Now we share pictures of grandkids who are about the same age as when some of us first met. Since I’m the number cruncher, I got the task of tallying up the tip and dividing the bill when we went out for a meal, and when the conversation turned to buying new homes or college costs, I was always asked to weigh in with my “professional opinion.”  Continue reading “Yes, I’m A Finance Geek”

The Life and Times of a Financial Educator

October 07, 2013

The week of October 7-13 marks the 12th annual Financial Planning Week that was designed by the Financial Planning Association to create awareness of the importance of having a personal financial plan.  In the spirit of promoting a profession that we love, the Resident Financial Planners at Financial Finesse will be writing about our experiences providing workplace financial education. Continue reading “The Life and Times of a Financial Educator”