Dr. Rita Green understands the importance of savings and the positive impact it has on families. “Saving money is an important element in the financial security of families,” Rita notes. “Savings provides a firm foundation that can help families weather the financial storms that occur due to job loss or unexpected expenses.”
As the Family Financial Management State Specialist for Mississippi State University Extension Service, Dr. Rita Green provides leadership in personal financial education under the broad categories of basic money management, credit control, fraud and identity theft, youth financial literacy, and homebuyer education. In 2013, Rita secured funding from the Bank of America Charitable Trust through the Consumer Federation of America to develop the TV segment, Your Money Minute.
Your Money Minute consists of brief, one-minute segments designed to air during America Saves Week. It first aired in 2013 on two Mississippi Delta-based stations and has run in consecutive years as part of the Mississippi Saves campaign. At this past year’s AFCPE Research & Training Symposium, Dr. Green was awarded the 2014 Outstanding Consumer Information Award for her work developing the series.
According to a recent report from the Corporation for Enterprise Development, only about 49 percent of Mississippians have savings accounts. Mississippi also has the highest concentration of payday lenders in the country. Your Money Minute airs on a station that reaches a population of over 1 million people in what is essentially one of the most economically vulnerable areas of the state.
The segments are designed to be brief. The brevity of the sessions increases the likelihood that viewers will listen to, and learn from, the important savings advice being offered. Not only do they air during America Saves Week, but also during the vulnerable tax season. During this time, many commercials are encouraging consumers to utilize predatory products for their refund checks. Your Money Minute offers a valuable message during a critical time. The segments replace the messages of predatory products with important advice on saving.
This week, Your Money Minute will air once again on television stations across the state. The series schedule includes:
Monday – Importance of Saving Money
Tuesday- SMART Goals
Wednesday-Identifying Sources of Money to Save
Thursday -Methods or Ways of Saving Money
Friday – Review of the Week’s topics
We applaud Rita, the innovative approach she developed to deliver important savings advice to consumers, and the good work she continues to do in the field. If you are a Mississippi resident, be sure to take the pledge to save at www.mississippisaves.org and tune in to Your Money Minute airing February 23 – 27!
Rational explanations for not saving typically follow expressions like: “I’d like to save, but…”, or “I think saving is important, but…” Intuitively, we know we should save. The importance of saving is often passed down through scripture, or through fables, and learned at an early age. Yet saving largely remains an abstract imperative. Why? How can we make saving a more consistent practice? First, we must understand three things:
Saving is hard. Saving money is much harder than most people like to admit, financial professionals included. Saving is especially hard when we feel like we cannot meet basic living standards, or live up to social expectations. While saving may be impossible when we cannot fulfill our basic needs, when our basic needs are met, opportunities for saving arise.
Saving requires deferring to our future selves. We live in the present, and are culturally trained to desire instant gratification. Saving contradicts this conditioning. As with any other financial management strategy we decide to pursue, saving must be directly guided by our goals. When we know where we are going, what we are trying to achieve, then identifying what we need in order to do so becomes an easier task. In other words, by clarifying for ourselves – and for those whom we hold close – what our goals are, we create a brighter contrast between our needs and our wants. This facilitates daily decision making that keeps us on track. It allows us to keep our eyes on what we achieve rather than on what we are giving up. Managing trade-offs becomes easier when we focus on what we gain.
Saving can be more than putting some of our discretionary income aside into a savings account. If we feel unsuccessful as savers, perhaps we have viewed the process somewhat monolithically. Saving can involve multiple aspects surrounding our personal finances.
The following list is intended to help broaden our concept of saving and the strategies we might choose to pursue in this endeavor.
- Identify your goals: What motivates you?
- Identify what you are saving for. Be specific.
- Use a spending plan (budget), and be intentional about your cash flow system.
- Seek strategies that facilitate productive behaviors, and that reduce or eliminate unproductive habits.
- Pay yourself first – Treat savings like another bill.
- Automate savings
- Include your family in the financial planning process.
- Eliminate unnecessary fees, or payments. Examine your bills and account statements.
- Identify what benefits you’re eligible for, and what resources are available to you in your community.
- Manage your taxes:
- Seek help in managing your taxes (denverabc.org).
- Use calculator on IRS website to determine appropriate tax withholdings from paycheck
- Maintain or improve your credit standing.
- Reduce debt strategically.
- Credit cards are not emergency funds, use them strategically: avoid using more than 25% of your credit limit, and pay off your balance every month.
- Pay more than the minimum on your credit card: you’ll save on interest and reduce your debt burden faster.
- Manage student loan debt: you may be able to reduce your monthly payments, or in some cases, have your loans forgiven or discharged.
- Buy used, or the previous year’s model, when purchasing a car.
- Factor being able to make an extra payment a year on your mortgage as part of a house’s affordability.
- Practice frugal living:
- Car pool
- Reduce utility consumption
- Practice comparison shopping
- Actually save money “saved” when purchasing items on sale, otherwise we may spend less on a particular item, but we are not actually saving, since it will be spent elsewhere.
- … (How else do you practice frugal living?)
- Shop for insurance regularly (especially when there is an improvement in credit scores).
- Consider a spending fast.
- If you’re not banked, get banked. Consider joining a credit union.
- Seek support. You don’t need to engage your finances alone. Consider seeking neutral professional assistance.
This list is not exhaustive. Please comment and share other strategies you have put in place in order to save.
Guest Contributor: Carlos A. Colón, AFC®
As financial counselors and educators, we are well-versed in the value of savings and we share that information in a variety of ways to our clients and students. A Financial Educator may offer advice through a community course on budgeting. Financial Counselors work with clients to develop a tailored savings plan to meeting their unique needs. Financial Researchers study savings habits and implications and use those results to directly impact the work happening in the field. But despite the professional role, one common mission is shared among all financial professionals –to help individuals and families meet their financial goals.
This week is America Saves Week. America Saves is a campaign managed by the nonprofit Consumer Federation of America, seeking to motivate, encourage and support low- to moderate-income households to save money, reduce debt, and build wealth. The week is an annual opportunity for financial professionals and organizations to promote good savings behavior; and it also offers individuals the chance to assess their own savings situation and recommit to saving for the future!
As a supporter of America Saves Week, and its sister campaign, Military Saves Week, we asked our professionals to share some of their top tips to build savings and plan for the future. Although we had too many submissions to share them all here, below are a few of our favorites. Follow us on social media and the AFCPE Blog for more tips throughout the week.
“Consider everything you pick up to buy, especially the small stuff, as a want or a need.
If it is not an absolute need, put it down! Put that money you would have spent in a jar or piggy bank”
~ Anthony C. Pope, AFC®
“Pay Yourself First.
When you earn a pay raise put 50% to some sort of investment. You were used to living without that money prior to the raise, so you can live without it after the raise. Even if it’s only a 2% raise, that’s 1% more towards your future that you weren’t saving before! Set yourself up for future Financial Security!”
~ Kimberly Bottema, AFC® Certification Candidate
“Just Start! Whether its $1, $5 or $500, a day, per week, or per month, just get started. The only way to become a saver is by actually saving. Start small, stick with your plan and watch your savings grow. Once you start to see the results, then you can challenge yourself to save even more as time goes on. No matter the amount, the biggest and most important step you’ll take is the first one. So just get started!”
~ Arianne Mockabee, AFC® Certification Candidate
“Figure out the pattern.
Think about the times you’ve regretted the way you spent money this past year. Is there a pattern of who you were with, where you were, how you were feeling or the situation you were in? If so, think about how you can prepare yourself for the next time…and there will be a next time! Can you avoid the situation? Can you be ready to say something differently, like let’s get separate checks or I need some time to think about this before I buy this? Can you force yourself to limit spending by only carrying cash and not keeping a credit card on you or automatically having money withdrawn from your paycheck and put into a savings account? Predicting times you are vulnerable to overspending can help you avoid or minimize the damage.”
~ Syble Solomon, AFCPE® Member
“Start with an amount that you know you won’t necessarily miss to develop the savings habit, and then increase it every 3 months.
You can also commit a percentage of bonuses and raises to it. Painless savings!”
~ Susan Bross, AFC®
“Make it automatic!
Depending upon when the funds would be needed start with emergency savings, then a CD or savings bonds, an employer’s 401K, and lastly investments you understand that should grow in value over time.”
~ Madeleine Greene AFC®
KISS – Keep it Simple & SMART
“Savings should be DOABLE. We want to set ourselves up for SUCCESS whenever possible. Make simple goals, write them down, and keep them SMART!
Specific – Write it Down!
Measureable – Your goal should be measureable in a dollar amount and by a specific date
(i.e. I want to save $1000 by February 25, 2016.)
Action-Oriented – What steps will you take to reach your goal—write these steps down too!
(i.e. In order to do so, I will save $83.33 per month in an interest-bearing savings account)
Realistic – Set a goal that is Realistic. Figure out your necessary expenses each month (before fun), factor in some fun (you know you’ll spend it, so plan on it). What’s left over?
Timely- Break it down. $1000 / 12 months = $83.33 PLUS $.04…and don’t forget to use an interest-bearing savings account!”
~ Kate Mielitz, AFC®
“Round up! Okay this is my crazy savings plan (but it works!) When we enter expenditures and deposits into our checkbook, we always round up for expenses and down for deposits. It might be a few cents or a few dollars – but it adds up. We call it our “secret money.” It ensures we never get too low of a balance, and if we don’t see the money in our balance, we don’t think about it. Last time my husband did this, when he closed his account to move, he had over $2,000 in “secret money.” Pretty sweet surprise!”
~ Mary Howard, AFC®
“Keep that loose change. Clean your purse at the end of the week. All loose
‘change’ goes into a large container. The accumulated funds become vacation or Christmas gift funds. One year I had almost $500.”
~ Celvia Stovall, AFCPE® Member
“Use different savings accounts for different types of savings. Some credit unions offer free “sub accounts” (additional savings accounts within the same main account), so that a member can separate savings by its purpose, and give each account a NAME!”
~ Kathryn Greiner, AFC®
Join the campaign – commit to your own savings and share your advice through the many events happening this week! Use the hashtags: #ASW2015 and #MSW2015 on twitter to follow the chatter. What are some more of your favorite savings tips?
Let’s face it—our personal information is everywhere and criminals are eager to get a hold of it and use it for personal gain. In recent years we can’t escape the endless stream of news reports on data theft from major corporations and retailers. The technology and protocol used to protect data has not kept pace with the ability and determination of thieves to hack networks and steal sensitive personal information. Reports of data theft include information ranging from social security numbers and credit card information to the user names and passwords of online accounts. This leaves consumers wondering what they can do to protect their sensitive financial data and their identities from these predators. Here are four simple steps you can take to reduce your risk of becoming a victim.
- Don’t Store Sensitive Information Online
A current trend in cyber crime is the theft of user names and passwords to consumer’s online accounts. Cyber criminals use this information to sign on to existing accounts to steal information and complete transactions, including tax returns. This theft can go undetected because it takes place inside the perimeters of an already established online account. The best way for consumers to prevent this type of crime is to delete sensitive information after a transaction is complete. If you decide to provide sensitive information within your online accounts, do not allow a website to store your credit card information or social security number. Sometimes a website will make it easy and ask if you would like to store your credit card number for later use, other times you will have to delete the information after the transaction is complete. Deleting your credit card numbers and personal identifying information after transactions will make subsequent transactions a little less convenient; however, it will keep your personal information safe if an online account is compromised.
- Provide Less Identifiable Information
Many websites require an online account to be established in order to access website content, even if no financial transactions will take place. Do you ever stop and ask why you need to enter your name and address to read the news, print coupons, or to play an online game? An easy way to protect your personal information in this situation is to provide a nick name and dummy address so that your personal information is not vulnerable. It is also possible to set up an alternate email address for these special situations that will protect the legitimacy and validity of the emails that come into your primary email account.
- Consider Cash or a Pre-paid Credit Card
When shopping at a traditional brick and mortar store, paying with cash is still a viable option. Not only will it prevent the theft of credit card information if a retailer’s network is hacked, but it can help you stay within your budget. Sometimes cash is not an option and often time great deals and convenience are accessible when shopping online. If you want to go a step further in protecting yourself in these instances, consider using a pre-paid credit card to make on-line transactions. The use of a pre-paid card will keep your credit or debit card numbers safe if an online retailer is hacked.
- Monitor Your Credit Report
Even if consumers take all the right steps and are vigilant with their personal and financial data, they still run a risk that their information and identity can be stolen. Many of these cyber criminal rings are set up outside the United States and are untouchable by local law enforcement. For this reason, the schemes and methods of theft become consistently more sophisticated. It is important to regularly monitor your credit reports for suspicious activity. The Federal government requires that consumers have access to each of their credit reports once a year through www.annualcreditreport.com.
Since it’s unlikely the threat of cyber criminals will diminish in the foreseeable future, it’s up to consumers to become vigilant and take additional steps to protect their finances and identities. Making conscious decisions on when and where you share your personal information is a great place to start.
Guest Contributor: Kimberly Love, AFC®, Zeiders
“My goal in teaching is to teach complex financial issues in a manner so that students can apply those concepts in their own lives.”
Teacher, mentor, speaker, inspirer – there are many words to describe Alena Johnson and the impact she has had on her students, fellow educators and the larger community. As a lecturer at Utah State University, Alena has taught over 19,000 students through courses in Family Finance, Financial Counseling and Balancing Work and Family; and she has mentored over 200 students choosing to enter careers in the financial field.
Alena is passionate about teaching about financial concepts and her enthusiasm is well received by students, community and professional audiences. Alena took the Family Finance class at Utah State University from 80 students to a class of 500 with a waiting list. In 2007 her class was voted as the second most favorite class across the entire campus of USU. Alena has not only helped students learn about good money management practices, she has also taught them how to apply them in their own lives.
AFCPE & AFC Professional Impact
Alena has been actively involved with AFCPE since first attending and presenting at the annual conference in 1999. Since that time she has given twelve presentations at the annual conference. She has also been the chair of the Certification Task Force and an invited member of the strategic planning committee and the job analysis committee. She regularly donates her time as a reviewer for symposium submissions and as a Symposium presider.
Her impact on AFC® professionals has been incredibly important to the organization. As an instructor of the AFC Webinar Review sessions, her guidance and expertise has helped individuals prepare for and pass the AFC examinations. She has aided both traditional enrollees in the program, as well as FINRA Foundation Military Spouse Fellows. In addition, her experience and understanding of the AFC competencies, has allowed her to play an integral role in examination and study guide development and maintenance for the AFC certification program.
Wide Spread Impact
Alena has created multiple publications to help individuals and educators improve money management skills in themselves and others. These publications have been used by individuals and educators throughout the world. Some examples include:
The Step-Down Principle – A simple, effective way to help individuals reduce their expenses incrementally. After its initial presentation in 1999, Alena Johnson’s Step-Down Principle has been used by financial counselors, educators and extension agents throughout the nation.
The Financial Checkup – A booklet that guides individuals through an annual self-financial assessment, offering several worksheets to help a person determine their current financial situation, where they want to go and how to get there.
Financial Remedies – A companion booklet to The Financial Checkup booklet that helps individuals cure problems discovered while completing their own financial checkup.
Financial First Aid – Designed for non-financial professionals to help individuals improve their money management skills. This booklet can be used by marriage and family therapists, clergy, extension agents, social workers and anyone else who encounters financial situations in their own practices.
Alena’s publications are frequently used in University coursework, by eXtension agents and financial counselors, and by therapists and social workers throughout the country. Her impact as an educator is wide spread, and the advice and knowledge she has imparted in her classroom and through her publications continues to impact individuals nationwide.