I recently attended the 2020 Association for Financial Counseling and Planning Education (AFCPE) virtual symposium. Below are ten “nuggets” that I took away from the speaker presentations and posters:
¨ Hope is a Key Outcome- ACFPE president Ryan Law noted that financial education, counseling, and coaching programs give people hope and a path forward for a better future. They change lives because they help people see their dreams as possibilities and develop a series of small action steps to achieve them.
¨ Financial Capability Improves Lives- Research presented by Dr. Jing Xiao from the University of Rhode Island found that different measures of increased financial capability were associated with decreased financial anxiety while debt was linked to financial distress.
¨ Savings Hacks Produce Results- The following tips were shared: give each financial goal its own savings account (or earmark), name your savings accounts (e.g., Destination: Disney World) to evoke emotional responses, transfer savings out of a checking account, automate savings deposits and transfers, track spending to “find” money to save, and track your progress and share it with accountability partners.
¨ Financial Advisors Should be Checked Out- The FINRA BrokerCheck® tool can help investors make informed choices about brokers and brokerage firms. It includes information about a broker’s employment history, disciplinary actions (if any), and investment licenses. FINRA also has a four-question Scam Meter to help users tell if an investment that hey are thinking about is a scam.
¨ Many Things are Beyond our Control- Financial author and speaker Carl Richards noted that money management is about feelings, not spreadsheets. People crave certainty and a “straight line” path from Point A to Point B, but, in reality, there are many detours in life. The best thing we can do is keep focused on the intersection (pictured in a Venn Diagram) of things that matter and things we can control.
¨ COVID-19 has Stressed Family Finances- Research conducted by the National Endowment for Financial Education in April and September found that over 80% of Americans reported feeling financial stress. Top financial stressors included amount of emergency savings, job security, retirement savings, income fluctuations, and paying different types of household bills. In response, nearly 2 in 5 respondents cut their expenses.
¨ Good Credit is an Asset- Credit hacks that prevent “dings” on a person’s credit history are maintaining a mix of at least three active installment and revolving tradelines (credit accounts), keeping low debt balances on revolving lines of credit, and always paying at least the minimum required payment by the due date. One missed payment can drop a person’s credit score by up to 100 points.
¨ SIGHT is a Better Goal-Setting Acronym- The letters stand for the words Specific (experienced with human senses), Informed (based on data), Graduated (has measurable progress points), Hard (pushes people out of their “comfort zone”), and Time-stamped (has a final deadline). SIGHT is more useful than SMART because people don’t work on goals that are not “Attainable” and “Relevant,” (in the SMART acronym), so they are already “givens.”
¨ Small Steps Add Up!- Financial goals should build in small steps that “move the needle” (e.g., steadily building up an emergency fund). Include progress points with rewards so you don’t feel deflated. Early financial successes, such as a small amount of savings or reduced debt, can be very motivational. A “first wind” fuels people to get their “next wind” and keep going.
¨ Economic Abuse Has Consequences- Financial insecurity is the #1 obstacle to victim safety in cases of intimate partner violence, which is estimated to be experienced by 1 in 4 women and 1 in 2 transgender individuals during their lifetime. Economic abuse occurs when victims are not allowed to work, keep money from a paycheck, and/or have a bank account, and have no fallback financial support system (e.g., friends or family members).