Supporting the implementation and dissemination of the student driven savings app, SaveIt!
Each year AFCPE® awards the Mary O’Neill mini-grant of $2,500 toward the implementation of an innovative, high-impact financial education project. In 2014, the grant was awarded to Clinton Gudmunson, an assistant professor in the department of Human Development and Family Studies at Iowa State University, to support the implementation and dissemination of a student driven savings app, SaveIt!
SaveIt! is the focus of a current project funded through the Council of Graduate Schools (CGS). The app, which is entirely student driven, was developed during a weekend competition called Money Game Jam. Once selected, it went through further development by a professional programmer and is now in the testing and pilot phase.
With the generous support of the Mary O’Neill mini-grant, Dr. Gudmunson is working with graduate student, Emily Sorenson, to write an implementation guide that discusses how to obtain, use and integrate the savings app into common university financial literacy initiatives and then disseminate the implementation guide to financial literacy focused departments at universities throughout the country.
In the spirit of Financial Literacy Month, we checked in with Dr. Gudmunson and Emily Sorenson for an update on SaveIt!’s progress:
This past Fall, SaveIt! was scheduled to be piloted and tested by both undergraduate and graduate student groups and selectively launched via targeted student organizations, departments, and advisers at ISU. How is the pilot going?
We introduced Saveit! in an undergraduate personal and family finance class, using a variation of the app that permits simulations of bank accounts, without transfers of actual money. We have learned some important lessons about getting students connected and working to integrate the app into lesson plans. The app will become an official part of the next iteration of a service course that is designed for all majors to teach college students, especially freshmen, how to manage their finances while in school.
Thus, the first version of Saveit! is testable and beginning to be used. We want to have a few rounds of testing, in our classes, to the ISU student body, and soon after, everywhere. Our key programmer had the opportunity to present the app to students in this undergraduate personal finance class about the development of SaveIt! and is now reviewing the feedback as we work with instructors on implementation with curricula and fit with a game-playing pedagogy (in the upcoming iteration of the course).
Can you share some innovative highlights of the Saveit! app?
The app allows you to set any number of goals such as saving for textbooks, a spring break trip, and/or buying a gym membership. The app provides a unique “alternative currency” feature that allows you to see what your choice to save is actually worth. The amount you have saved can be quantified in terms of pages, days, or another parameter that can measure the progress appropriately. The app also allows you to set reminders to save money. Two examples of ways to save include ordering water instead of a drink the next time you go out to eat and giving up your morning coffee. You can set the reminder to ask you “Did you buy a drink at lunch today?” “Did you buy coffee?” and it gives you the option to put the amount you saved on those other expenses into your goal fund.
Once you have determined your goal(s), how much you want to save, and when you want to reach your goal(s), you are on the path to achieve success. You can transfer money between goals and into your personal checking or savings account easily. This app allows you to have as many goals as you want without creating another bank account as long as you stay within the $999 parameter.
How do you feel that Saveit! will make an impact on University financial literacy?
SaveIt! will impact university financial literacy by allowing students to see how far saving their money can take them. It will help the majority of students become aware that they cannot purchase all of their wants and needs each month and will help them to recognize the need to prioritize their savings for items they want to purchase. The app will help to instill that instant gratification can have detrimental effects on the pocket book. By being able to easily transfer money from a personal account to a goal account, set numerous goals, and visually see how much they are saving and have the ability to track their process, students will be better equipped to manage their finances after they graduate college.
Learn more about Saveit! and the progress of this project in Jacksonville this November. Dr. Gudmunson will join financial educators, researchers and practitioners at the 2015 AFCPE Research & Training Symposium in Jacksonville, FL where he will present a breakout session on Saveit!
AFCPE: Building the Bridge from Research to Practice
The goal of the Financial Literacy effort is to provide consumers with the knowledge and skills they need to make good financial decisions on their own. Individually, as financial researchers, educators and practitioners, you are regularly focused on the financial literacy effort. Working collectively, you can enhance your efforts!
National Financial Literacy Month, sometimes referred to as National Financial Capability Month, is a month-long campaign to raise public awareness about the importance of financial literacy and the need for financial education. This month, AFCPE® proudly joins our partners in the field to encourage financial literacy efforts and acknowledge the many and diverse contributions that researchers, educators and financial professionals, like you, have made in support of this effort.
“What makes AFCPE® so unique is that we bring together a diverse group of professionals who support the common mission of improving the economic wellbeing of individuals and families worldwide,” says Rebecca Wiggins, Executive Director of AFCPE. “This month we want to showcase the importance of these distinct yet connected areas of the field in a way that honors our rich history and looks to the future to continue setting the standard for this field.”
Social media is quickly becoming one of the best places to network and share resources. During Financial Literacy Month, we invite you to follow and engage with AFCPE’s social media platforms and take part in our social agenda.
AFCPE’s Financial Literacy Month Social Agenda
- April Week 1: Financial Literacy & Research
- April Week 2: Financial Literacy & Education
- April Week 3: Financial Literacy & Practice
- April Week 4: Building the Bridge
All who engage with AFCPE social media this month will be entered to Win 50% off 2015 AFCPE Symposium Registration. The winner will be announced on social media on April 30. Your Involvement is up to you, but we encourage you to engage all month long! Like a LinkedIn article, comment on a Facebook post, retweet an AFCPE announcement or share the “Value of an AFC®” video with a friend or colleague. Twitter followers, use #FLM2015 to join in and follow the Financial Literacy Month conversation!
Thank you for your work in the field and for playing an important part in the Financial Literacy effort!
Madeleine Greene is an award-winning educator, speaker, author, TV and radio show host and value-oriented penny pincher at heart. In 2014, she added AFCPE Financial Counselor of the Year to her list of accolades. As a longtime, active member of AFCPE®, Madeleine has played an instrumental role in AFCPE’s history and growth, but this past year she was honored by the professionals in our membership for the incredible work that she does as an Accredited Financial Counselor (AFC®).
Madeleine retired as a tenured member of the faculty of the University of Maryland-College Park in 2007, but continues to work tirelessly as a military consumer financial services consultant and money counselor. “Madeleine has a passion for helping individuals understand the importance of their actions today and the impact that these actions have on the stability of their financial futures,” said a nominator. “She helps clients establish a budget, track their spending, understand the impact of credit use and creating a savings plan using available resources to track and reach their financial goals.”
Her clients are diverse – ranging from service members returning from Afghanistan with significant savings and no understanding of how to build wealth to a young widow having to make financial decisions in order to provide for herself and her child. She also does pro bono work with senior citizens, helping them apply for property tax credit, file income taxes, qualify for Medicaid, conserve their resources and avoid scams.
In addition to one-on-one financial counseling, Madeleine has been highly involved in curriculum development and educational programs. She was part of a team that developed the personal finance curriculum used by the military life consultants, and she has presented more than 100 seminars to service members of all groups and sizes. Since 2008, her educational presentations have reached more than 50,000 individuals a year. Madeleine is also currently serving as the Chair of the AFCPE Certification Council.
Her passion for the field and for consumers is evident in her work as a Maryland Financial Literacy Coalition Member. She recently testified before the Maryland Legislature in support of legislation requiring a personal finance class as a graduation requirement and she worked with the Fredrick County Commission for Women to develop the MD Women’s Conference, providing knowledge and skills that positively impact the financial future and quality of life for women and families in Maryland.
Colleagues and clients alike value Madeleine’s unique approach to counseling and education. She makes financial topics that can seem overwhelming or complicated, understandable. Life savers, payday candy bars, 100 grand bars, larger than life currency, shredded money and flashing dollar signs are just a few of the tools she uses when teaching basic money concepts to groups. Madeleine understands her audience and uses real life events as the basis of her financial lessons.
Madeleine educates, counsels and mentors with a level of commitment felt by all whom she serves. Her level of expertise in a variety of areas has allowed her to affect positive change in many different ways within the field. The legacy that Madeleine has built will be the tremendous impact she has had on our organization and on the field of financial counseling and education.
The rich are getting richer. We know, next subject please.
We can whittle away a lifetime wishing our grass was as green as that next door–too many of us do. Instead, I think I know what the next subject should be, and it’s NOT being taught or talked about despite a ridiculous low cost and high level of interest on the part of students–at least the students that I have had the pleasure of working with to date.
On Friday afternoons I serve as a part-time lecturer at the University of Pittsburgh, and my subject is personal finance. An exercise in class revolved around a real-life case of an 18-year student attempting to trade a used car for a similar used car. In addition to his existing vehicle, this student had saved $1,000 to help with the “upgrade”. The class exercise was to review the potential transaction, and consider possible alternatives. For example, keep the car and make a one-time investment using the $1,000.
As a group it was decided to instead open a Roth IRA, invest in an S&P 500 index fund, and not touch the funds until age 70. Using the 10.9% annualized return of the index for the past 100 years, the class came up with an ending value of $216,990 – they were floored. Since no one believed it, we started over from the beginning, and unanimously the class again arrived at $216,990. But that’s not the lesson.
One student was so flummoxed that he stated the calculation wasn’t possible, because, “…if it were possible to turn $1,000 into that much money, then everyone would be doing it.” Candidly I asked about his savings, and he admitted to no such effort. When I asked why, he paused and replied, “I didn’t know…” and the lightbulb went off.How many of us “didn’t know”? How many of our kids, students and employees “don’t know?”
Today’s results are predictable in part because the world is cleverly stacked against our wallets. In addition to peer pressure we are encouraged to take on debt, and billions of dollars are spent each year in a well-orchestrated effort to get us to spend that $1,000 rather than save it. We are NOT taught the consequences of our actions. It has been my experience, after three years of working with high school and college students and hearing their feedback, that the vast majority receive virtually no practical introduction into the world of basic money stuff. Too bad, since basic money stuff is going to touch each and every student, and the decisions they make from early ages have a snowball effect.
How do you solve the wealth inequality that exists? Teach our kids about the decisions they will face. I don’t mean economic theory or investment principles. Basic practical things: the first credit card, college loans, the first car (or not), the first apartment, that cellphone upgrade, the value of a job and of saving a little bit. And don’t teach them once, but remind them constantly. Every high school – andcollege – should be required to review this information annually with each student. Imagine if that $1,000 above were $2 000? Or, $1,000 a year for life?The solution to narrowing the wealth gap – to money ignorance – just isn’t that hard. Instruct and inspire the kids. And the solution is apolitical since it applies regardless of race, creed, color or economic status. Show them that their economic future is something that they can CONTROL! Believe me; they WANT to learn about this.
Leaders are defined by their actions, and in this case we can all be leaders. First, by taking steps to control our own financial future, and second by showing our friends and family how they can do the same. You don’t need to be in the 1% to save and invest, and when you are young (as in the example above) a little bit, can go a long way.
Sometimes the simple solution is the right solution.
Guest Contributor, Gene Natali Jr.
Originally posted February 18, 2015 on The Missing Semester.
Working part time as a PFC, I help military families regain control of their finances. Some come to see me as an order from their commander while others come voluntarily, looking to regain control of their finances. Whether it is a young single airman or a more seasoned couple, the overwhelmed look of not knowing where to start is the same. Where does my money go? How will I ever pay off all these student loans/credit cards? How do I start investing? These are all questions we commonly hear as financial counselors.
But, they all boil down to one larger question: do you want to be in control of your finances? Or do you want your finances to control you?
My solution? A budget.
It is the most basic and underutilized tool, and the best way to regain control of our finances. Here are 6 things to remember as you get started:
- The budgeting process seems scary at first. No one likes seeing how much they owe on paper – especially when it outweighs what they own. But, being vigilant and aware of finances and debt is better than burying your head in the sand and ignoring the problem at hand. In the military, if your finances get out of control, you can lose your security clearance and the ability to do your job or make the next rank. It can also create oppressive debt and bad credit, which affects many other financial decisions in your life.
- A budget is a living document. It changes as life changes. A budget, or spending plan, allows you to stay in control of your money and be sure that it is working for you and your goals. It is important to review this each month and adjust as needed to accommodate different seasons of life.
- You must track your expenses. An organized financial management system can help you save money. But, first you must put pen to paper (or fingers to keyboard) and fill in the blanks. Income and fixed expenses are more obvious since most people are usually aware of what they bring in and spend on a regular basis. Then, you must think through the variable expenses: how much is spent on gas for the car, groceries, or eating out? Many times it’s the little expenses that add up: a cup of coffee, stopping at a drive through, the vending machine, contributing for a gift at work, etc. Other times it’s the unexpected expenses such as a flat tire or unexpected medical bill that come up and there is no savings to pay for it so debt is incurred.
- Systems may vary, but finding one that works for you is important. Start with an educated guess, but then you will need a system to track your money. One way to do this is to spend as you normally would and keep receipts for at least 2 weeks in an envelope. When separated out, the receipts will fall into categories (gasoline, eating out, groceries, etc.). Multiply those expenses by 2 and record in the appropriate category. Keeping receipts and calculating every 2 weeks will keep you honest with your budget. Other ways of tracking spending is to keep an index card or small notebook in your pocket and jotting down all your daily expenses. You might also use an online budgeting system like Mint or YNAB.
- You must define your priorities and goals. Budgets are based off of priorities, which make them unique to each client. I ask my clients to find places where they can cut expenses and save money. This process can be personal and frustrating. Clients have to face the hard truth and decide whether an expense is an actual need or a just a want. Having a priority list sitting next to you is useful to refer back to when having trouble making a decision. If religion/church is a priority then tithing is not an area one would be willing to cut so maybe they are more willing to go to a salon less or get rid of cable TV. You can afford to do whatever you want as long as there is money in the budget. If you have debt then there is not money in the budget to do everything you want, hence the creation of debt.
- Budgets don’t stop you from living – they help you start living the life you want! People are surprised by how much they can live without when trying to get out of debt. The majority of places I find that can be cut are: beauty supplies/salon, eating out, cable or satellite TV, cell phone plans, smoking, drinking, and recreational activities. I also inform them that many utility companies offer budget billing which spreads their yearly usage over a 12 month billing period. This is easier to place in your budget then having an unexpected large electric bill. For active duty service members, I also look at and loans obtained before entering the military and ensure they have a maximum interest rate of 6%. Under the Service member Civil Relief Act (SCRA), while on active duty those interest rates can be lowered to 6% and the excess interest is forgiven.
As financial counselors, we do our best to educate and lay out all options for our clients. But ultimately these budget decisions must be made by the client and become an action plan on their goals. Sometimes the hardest part of being a counselor is trusting the process: providing education, support and accountability and then letting go so that our clients can apply this knowledge into their own lives and begin to realize their goals.
Guest Contributor: Rebecca Denton, AFC®