Daily Due Diligence (D3)

D3Author’s note: While recently counseling a soldier I discovered the conversation of investing was completely overridden by an ignorance of the “basics” –  monthly budget adherence and awareness of where their money was really going.  Hence the back to the basics discussion of daily (okay, weekly or monthly) due diligence was born.

Feast or Famine:  Finances are a significant part of everyday decisions.  Often, our money is only given intentional thought during urgent times of the year – taxes, holidays or vacations – paired with the moments when life forces us to evaluate our finances emergently – a family emergency or a flat tire. The suggestion is daily due diligence (D3TM), working on a piece of our finance puzzle regularly.  Just as a diet or exercise requires daily effort, the thought that our finances do too should not seem shocking.

Case in Point: How many have created a household budget only to it file away? The price of gasoline can change daily. However, the budget we created once upon a time does not reflect this.  Our budget should NOT be a static document, but one that mirrors the myriad of life events.  How many financial counselors have experienced the answer; “I really don’t know how much I spend on__________.”?  If creating a budget is the universal starting point when taking control of our finances, then the flexible classifications should be as accurate as possible.

The task of D3TM could seemingly be an unwelcome addition to our already full daily lives.  A simple suggestion for making this necessity more manageable follows:

Track one item of significant expense a month.

First month’s challenge: How much do you actually spend on groceries?  What is our household definition of groceries?  Is this only the food our family consumes or does this include shampoo and dog food?  In our budget, where is our daily cup of commute coffee located? Is it categorized groceries, eating out or not at all?  Saving our receipts (even a cash purchase) for one month and totaling is not hours of contemplation. If groceries are already an expense that is a realistic number within your household, then try tracking total gasoline expense. The results may be surprising.  Psychologists have long espoused the theory that “awareness of a behavior can create change”.

The impetus for simple D3TM is to override the common feeling of “my money controls me/my decisions”, and replace them with “I control my money.”  D3TM has the potential to open discussions of spending within a household, teach our children the beginning basics of money handling and most importantly, create a feeling of control, ownership, and peace of mind.

In future articles, I want expand on some D3TM techniques.  Please share your suggestions and thoughts on regular financial maintenance.

Guest Contributor: Heather Baker, AFC®, FINRA Foundation Military Spouse Fellowship Program Assistant

May 4, 2016 at 1:23 pm, by admin | No Comments | Category budget, financial education, General

Financial Literacy Day on Capitol Hill 2016

Hill Day LogoAnother Financial Literacy Month is in the books. It is great to see the buzz and number of events nationwide increase every year. I had the pleasure again this year to represent AFCPE® at Financial Literacy Day on the Hill at the Hart Senate Office Building. The event began with the Jump$tart Coalition, Junior Achievement, and Council for Economic Education in 2003 and has expanded to include over 50 organizations from all facets of the financial industry.

This year’s event was hosted by the three co-chairs of the Senate Financial and Economic Literacy Caucus, Sens. Tom Scott, Jack Reed, and Joe Donnelly. Sen. Tom Scott spoke briefly about growing up in poverty and looking for a way out. You can see why he believes in financial literacy and providing the resources for every American to help themselves. Sen. Jack Reed spoke about collaborating across organizations and utilizing resources. This event showcased just that. I was amazed by the great work being done in the field and especially the resources out there for consumers and educators alike. Many of them are free!

There are government agencies providing literature of all kinds from newsletters to brochures to flyers. Places like the Federal Trade Commission, FDIC, Consumer Financial Protection Bureau and even the Office of the Comptroller of the Currency have publications on everything from credit to student loans to managing someone else’s money. Many of these can be found at If you are looking for larger quantities, several of these agencies have bulk order options through their website.

The resources don’t stop at the government; many other organizations are developing great tools and making them available, often at low or no cost. My table was located near NextGen Personal Finance and they have some awesome free curriculum for educators. No need to develop everything from scratch. I was very interested to see that DECA is in the financial literacy game. I was a DECA competitor in high school and it led me to my choice of college and first career. Who knows, if they had the personal finance programs back then, I may have made it to this industry even sooner. Throwing me even farther back in my childhood, I was amazed to find that there is even a program from National Credit Union Foundation featuring the Berenstain Bears.

If you find yourself in DC next April, a spin through the resources at Financial Literacy on Capitol Hill Day is well worth the time. In the meantime, a spin around the internet or a talk with colleagues at the water cooler may lead you to just the resources you need to support your program. Take a look at what is out there.

What are your favorite financial literacy resources?

Guest Contributor: Kira Dentes, AFC®

May 2, 2016 at 4:20 pm, by admin | No Comments | Category financial education, General


Mia B RussellEach month we spotlight an AFCPE® member who is making great strides in our field. This month, get to know AFCPE member, Mia Russell.

Tell us a little bit about your background and what led you down the path to become a financial counselor & educator?

My first position, post undergraduate, was with a financial institution (Wells Fargo then Norwest) as a credit counselor. I learned the importance of credit and its impact on all areas of our lives. As with many new careers, I took advantage of other opportunities and also worked in community development, specifically to help increase homeownership among ethnic minority and low-to-moderate income families. I transitioned to self-employment in 2000 and ultimately opened a real estate brokerage. My training as a counselor with Wells Fargo was embedded in all my interactions and with over 15 years in housing and housing-related roles, I wanted to pursue graduate studies in the field. In 2011, I met with Dr. Jinhee Kim to learn more about the UMD doctoral program and a year later she emailed me the UME position announcement. At UME, my experiences and education blend well… it has been a natural progression that I never imagined but am certainly excited to have!

Your project and research interests include workplace financial education and the organizational effects of financial well-being, health insurance literacy, entrepreneurship, and youth financial education. Share a little bit about what you’re working on currently.

Currently, most of my time is spent working on health insurance literacy and youth financial education. With the passage of the Affordable Care Act, the University of Maryland Extension capitalized on the need to help Americans better understand health insurance. In partnership with the University of Delaware Cooperative Extension and others across the nation – including many AFCPE Extension Educator members – we have developed and tested a comprehensive, research-based curriculum, Smart Choice Health Insurance™. Pilot tests with 1500 consumers demonstrated reduced confusion and increased confidence and competence of consumers making health insurance decisions. This program has received two national and one state award of excellence. We are now pilot testing Smart Use Health InsuranceThe new curriculum has a strong financial focus, based on the literature, with an emphasis on understanding, estimating and tracking health care costs and insurance coverage. The curriculum will be available in Fall 2016. Youth entrepreneurship and financial education is another exciting area. I enjoy working with youth and helping them to set financial goals. We recently developed a middle school curriculum, Financial Nuggets, and we are pilot testing the curriculum. In fact, we received a grant to use this curriculum, which includes funding ($50) for the participating youth to open bank accounts.

In addition to being an extension educator, you are also a real estate broker. On LinkedIn you say that you “Operate from the philosophy that real estate is one financial “tool”, [and you] strive to help clients construct (realize) their financial goals and dreams.” This is a great philosophy. Was it your position in real estate that inspired you to get become a financial educator and earn your AFC certification?

My experience in the financial services, mortgage, and then real estate certainly helped shape me and definitely served as inspiration. These experiences help me to realize that homeownership is one tool that can help someone achieve financial security. I also began to realize that the dream of homeownership had much to do with many other dreams and aspirations – some of which were related to money and financial stability. While I had financial education and experience, the AFC offered credibility and is well-recognized in the financial education and counseling fields.

What do you find most beneficial about being a member of AFCPE?

AFCPE truly advances and supports financial education. The education, including the annual symposium, journal, webinars, and newsletter, helps me stay informed about the field. I look forward to attending the symposium and always leave with a tremendous amount of information, ideas, and opportunities.

As a financial counselor and educator, what is your favorite personal finance advice?

In terms of savings, start small… just start. I recall a client telling me how she saved $100K in her regular savings account (I was excited at the fact she saved but disappointed that it was in her savings account earning .01%). She started with whatever she could – $5 here, $20 there… and then she included the extras that came her ways like pay increases and any gifts/windfalls. She made it a game – to see how fast she could get to the next thousand by foregoing unnecessary expenses or finding lower prices and saving the difference – and although it took her 15 years, the satisfaction she received was outstanding.


April 28, 2016 at 1:52 pm, by admin | No Comments | Category financial education, General

Financial Stress: Encouraging Students to Seek Help

broccoli2According to the 2014 National Student Financial Wellness Study, a staggering 70% of college students are stressed about finances. This statistic is concerning on many levels. Research shows that financial stress is a strong factor in academic failure, can lead to health issues and is associated with negative financial behaviors.

With more college campuses developing financial education programs, peer counseling models and a number of financial education resources, how do we encourage more students to seek help from financial counselors and educators?

Factors that influence help-seeking behavior:

In their 2015 study, Financial Stress, Self-Efficacy, and Financial Help-Seeking Behavior of College Students, published in the Journal of Financial Counseling & Planning (JFCP), HanNa Lim, Stuart J. Heckman, Jodi Letkiewicz and Catherine P. Montalto build upon an existing financial behavior help-seeking framework, to determine the factors that influence help-seeking behavior. These factors include:

  • Gender. Male students were less likely than female students to seek financial help.
  • Race. Black students were more likely to seek help than white students.
  • Class Rank. Students were less likely to receive help as their class rank increased.*
    *This finding differed from earlier research, but the authors believe that financial counseling services are more likely to reach students early in their college experience, when they tend to be more engaged with the campus community.
  • Immediate Financial Crisis. Students with high student loans debt or who were facing immediate financial crisis were more likely to seek financial help.
  • Personal Finance Education to Increase Self-efficacy. While other research has shown that less knowledgeable students are more likely to seek help, this study found that students who have received personal finance education are actually more likely to seek help. This may be due to a better understanding of where to access help, or to diminished overconfidence in their own financial capacity.

How can financial counselors and educators effectively use these findings to encourage help-seeking on college campuses?

The research suggests that the findings may be useful to financial counselors, educators, and practitioners who are focused on developing strategies, tools and resources to assist college students with their personal finances. They suggest:

  • Exploring strategies to help better reach populations less likely to seek assistance, such as men or students further along in the education process (i.e. nearing graduation).
  • Offering personal finance courses early (to incoming Freshman). Start loan education early, to avoid the financial shock before graduation. Make students aware of the tools and resources available to them earlier, which will better direct them to financial counselors later if additional guidance is needed.
  • Increasing financial knowledge may increase financial self-efficacy and should be a strong consideration in campus financial wellness initiatives.

Extending beyond the campus:

As the research indicates, both financial knowledge & awareness are important precursors to help-seeking, and this understanding extends beyond the campus into all client / practitioner relationships.

 “Financial stress is positively associated with financial help-seeking, and the positive association is stronger among individuals with high financial self-efficacy. Understanding self-efficacy of clients can inform appropriate outreach in response to economic and market changes. Clients with higher financial self-efficacy may self-identify the need for help and initiate contact, while clients with lower self-efficacy may respond better to advisor-initiated contact.”

The authors suggest that future research should consider using experimental designs to more strongly establish the causal relationship between financial stress, financial education, financial knowledge, and financial self-efficacy.

As financial educators, researchers and practitioners, what are your ideas for testing these relationships?

April 25, 2016 at 11:16 am, by admin | No Comments | Category financial education, General

Understanding Saving Behavior

broccoli2The study of human behavior is fascinating. Why do two people in seemingly identical situations often make such different choices? What differentiates successful savers from those who are not? Furthermore, what can financial planners, counselors, and educators do to encourage savings behaviors and better support clients in their efforts to put money away for future needs and wants?

As financial counseling professionals you are regularly tasked with helping clients make productive movements toward accumulating savings for future needs or desires. In this quarter’s edition of AFCPE’s Member Newsletter, The Standard, Erica Tobe, PhD takes a closer look at three recent research articles that “provide a sound base for savings and have [important] implications when working with clientele.”

The below has been republished from AFCPE The Standard Newsletter 2016 Q2:

Research Briefs: Fostering Effective Savings Behaviors, by Erica Tobe, PhD:

“Savings Goals and Saving Behavior from a Perspective of Maslow’s Hierarchy of Needs” by J.M. Lee and S.D. Hanna (Journal of Financial Counseling and Planning, 2015).

This study used national survey data (Survey of Consumer Finance data from 1998–2007) to better understand the relationship “between [a] savings goal and savings behavior from a perspective of Maslow’s Hierarchy [of Needs].” Study findings showed that the most frequent reason to save was for retirement while self-actualized goals were strongly connected with the likelihood to save. This study suggests that targeted education around saving should focus “on saving aims and goals” to help clients achieve a particular desired outcome. As a result, practitioners may help clients improve household saving behaviors by empowering clients to create personalized and specific savings goals that intend to “fulfill an individual’s desire” rather than accomplishing a goal due to a “specific duty or obligation.” Helping a client determine a goal that is specific and personal to them may help increase their likelihood to save.

Individual and Institutional Factors Related to Low-Income Household Saving Behavior” by S.J. Heckman and S.D. Hanna (Journal of Financial Counseling and Planning, 2015).

This study used data from the Survey of Consumer Finances to better understand the factors related to saving behavior of low income U.S. households. The authors found that households with social networks (including relationships with institutions such as banks and credit unions and financial professionals such as a financial planner) and having a clear purpose to save were strongly associated with positive saving behaviors. Additionally, having access to credit and/or local financial institutions and the ability to contribute to an employer sponsored retirement plan encouraged positive saving behaviors among low income households. Practitioners can play a pivotal role in encouraging the use of financial professionals and identifying a purpose to save as important for low income families. In addition, educating clients on how to “access financial institutions” and encouraging the use of saving through “automatic transfers” such as employer sponsored retirement plans should be considered.

“Self-Efficacy and Savings Among Middle and Low Income Households” by J.M. Lown, J. Kim, M.S. Gutter, and A.T. Hunt (Journal of Family and Economic Issues, 2015)

This study, which is a subset of larger North Central 12 state multi-state research project, focused on a population of low and middle income households and the relationship between self-efficacy and their personal likelihood to save. This study defined self-efficacy as a “belief in one’s capability to achieve or succeed at a given task.” Study findings suggest that “higher levels of self-efficacy are associated with a greater likelihood to save” for older and middle income households. As a result, practitioners can and should “develop and incorporate strategies” within financial education programs through the use of “activities, exercises, and financial video games” to enhance self-efficacy skills in financial education courses. By following this approach, changed savings behaviors and positive decision making skills for clients can be fostered. These studies, in tandem, illustrate the importance of creating positive saving strategies with clientele.

As financial professionals, how can we more effectively connect low-income families to financial counselors and educators?

Share examples of a situation where helping a client determine a goal that is specific and personal to them, helped them increase their likelihood to save.

What are some ways that you have used activities, exercises, or technology to enhance self-efficacy skills in your financial education courses or with your clients?

April 18, 2016 at 7:47 am, by admin | No Comments | Category financial education, General, saving