- Personal finance revolves around decision-making. Good decisions are based on criteria that are important to a decision-maker. Every decision has consequences and opportunity costs (i.e., things that you give up).
- Useful investment planning tools include an Asset Allocation Tool from Vanguard and a Risk Tolerance Assessment from Wealthfront. Results are based on assumptions used and the accuracy of user data.
- Twitter posts (tweets) are increasingly used for research and planning. For example, tweets about illnesses have been used to predict flu outbreaks. Researchers review and code tweets to determine thought patterns.
- All financial education programs, no matter how well they are funded, need to be critically evaluated. Programs can’t be tweaked (improved) if their impact and results are not measured.
- Messages about saving should be reframed to appeal to people. Educators need to answer the question “What’s in it for them?” Example: The purpose of saving money today is to spend it with a purpose later.
- Knowledge of personal finance (or any topic), in and of itself, is not power. Knowledge gives people power only if they act upon it. People learn best through relatable stories, humor, and actionable instructions.
- People increase the probability of achieving a goal if they commit to someone that they will do it. Also, when you “start small,” you reduce your fear of failure. Stack small positive changes on top of each other.
- Many workers today do not have a steady paycheck. People with irregular incomes can “guesstimate” their annual income to make a budget by taking their last 3 month’s income and multiplying that number by 4.
Friday, April 13, 2018
Miscellaneous Nuggets from a Professional Conference (IFL)
I recently attended the Institute for Financial Literacy 2018 Annual Conference on Financial Education. Below are some ideas that I gleaned from this meeting and from a book (The Pouchplan Budget) that I read on the way:
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