Take-Aways From AFCPE Symposium Recordings

 

One of the great features of the annual Association for Financial Counseling and Planning Education (AFCPE) Symposium is that AFCPE records all of the breakout sessions and makes them available to attendees online for a year. Gone are the days when you needed to choose one session from among multiple topics of interest and miss hearing the others.

During the past nine months, when I had time, I slowly made my way through parts of the 2024 Symposium that I missed and was interested in. This post provides a very eclectic summary of my key take-aways from the “rest of the AFCPE Symposium.”

Sequence of Returns- This term refers to the order of investment returns in retirement. In other words, good years first/bad years last or bad years first/good years last. It is not the average return throughout retirement that matters but, rather, the order in which returns arrive.

Sequence of Returns Risk- This is the danger that poor investment returns early in retirement, combined with withdrawals for living expenses, will reduce a portfolio’s value, increasing the risk of running out of money sooner, even if average returns are acceptable. Most sequence of returns risk happens during the first half of retirement.

Buffer Assets- These are assets outside retirement accounts that can pay expenses during market downturns to shield retirees from having to make withdrawals from equity assets. Examples include high-yield savings accounts and money market funds, home equity lines of credit (HELOCS), cash value life insurance, and reverse mortgages.

Financial Education Courses- The “gold standard” for high school financial education is at least a full semester stand-alone course and, in 2023, eight states passed a financial education requirement. As of July 2025, 29 states guarantee a personal finance course. Most state mandates are unfunded. Why the momentum? Great advocacy work, organizational support, and research findings showing the effectiveness of, and positive impacts from, financial education.

The American Dream- Research findings show the term “American Dream” is highly individualized  but perceived by most people as owning a home, having a comfortable retirement, and an expectation that your children will have a better life than you. White, Asian, and higher-income Americans are more likely than others to say they achieved the American Dream.

Reinventing Yourself- A panel of speakers discussed the process of transitioning to a new career within the financial education and counseling space. The benefit of doing this is that “you know things” and can transfer knowledge and skills honed during a prior career. In other words, you don’t have to start at the bottom. Some people also get paid more when they switch careers. A key to success is trying to differentiate yourself through skills, credentials, and experiences.

Next month, I look forward to attending the 2025 AFCPE Symposium. I’ll be teaching a concurrent session myself and once again learning from, and networking with, professional colleagues and sharing best practices in financial education.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.

 

Are You Financially Resilient?

Financial resilience is the ability to withstand life events that impact one’s income and/or assets.  In everyday language, resiliency is the ability to “roll with the punches” and carry on despite life’s setbacks. Resilient people often “use lemons to make lemonade.” 

Some financially stressful events, such as unemployment, divorce, disability, and health problems affect people individually.  Others, such as the COVID-19 pandemic, economic recessions, stock market downturns, and acts of terrorism, affect society as a whole.

Research by Dr. Sharon Danes, a professor at the University of Minnesota, found that there are five characteristics that enhance people’s resilience in the face of life’s changes and challenges.  These five characteristics are being positive, focused, flexible, organized, and proactive:

¨     Positive people view challenges as opportunities. They reframe situations positively and often use the expression  “it could have been a lot worse” when comparing their misfortune to others.

 

¨     Focused people determine where they are headed in the future and stick to their goals so that life events and other barriers do not deter them.

¨     Flexible people are open to experimenting with new ideas and different options when faced with uncertainty.

¨     Organized people set priorities and develop structured approaches to manage change and get things done.

¨     Proactive people work with change rather than defend against it. They anticipate and prepare for what might happen instead of responding to events after they happen.

 

Financial resiliency is enhanced with financial resources, such as savings, health insurance, and a good-paying job.  Another resource for financial resiliency is one’s human capital.  Economists define human capital as all of the knowledge, skills, experiences, and other personal qualities that people have to “sell” to potential employers. 

Social capital also increases financial resiliency.  This includes a support system of family, friends, co-workers, neighbors, and others that can provide financial assistance, not to mention emotional support, during hard times.  An example is someone driving a friend to a cancer treatment, thereby saving them the cost and stress of getting to the hospital on their own.

Commonly recommended financial behaviors can increase financial resiliency.  Below are five examples:

¨     Maintain a Low Debt-to-Income Ratio- Keep monthly consumer debt payments (all debts except a mortgage) at 15% or less of monthly take-home pay.  A ratio of 20% or more is a danger zone. Example: $275 of debt payments ÷ $2,500 of net pay equals a consumer debt-to-income ratio of 11% (275 divided by 2,500).

 

¨     Accumulate an Adequate Emergency Fund- Save at least three month’s expenses.  Keep this money liquid in cash equivalents such as a credit union, money market mutual fund, or short-term certificate of deposit (CD).

 

¨     Learn to Earn - Never consider your education or job training finished.  Continue to gain knowledge and develop new skills to increase human capital and remain employable in today’s competitive labor market.

 

¨     Purchase Adequate Insurance- Protect dependents against the loss of a breadwinner’s income with life insurance and buy disability insurance to provide continued income following an accident or illness.

 

¨     Increase your Financial Knowledge- Learn one new thing every day about personal finance. Good financial information sources include magazines, workplace seminars, blogs, podcasts, websites, certified financial planner® professionals, adult education courses, radio and television shows, and investment clubs.

 

For more information about increasing financial resilience, review this post from the Get Rich Slowly blog.

The Awesome Power of Financial Education

Financial literacy is an essential life skill. During the past year, there has been significant growth in the number of U.S. students taking personal finance classes. Some have called this increase in financial education a movement, even an “inflection point”; i.e., a time of significant change and progress.

I recently attended several webinars and virtual meetings about financial education and participated as a panelist on a Twitter chat about the role of financial education in adult financial well-being sponsored by the University of Chicago Financial Education Initiative.  

Below are eight of my key take-aways about financial education from these programs:

Doing Nothing is Not a Good Option- Costs result from a lack financial literacy. As I noted in a 2013 blog post, they include forgone savings and investment opportunities, lives shattered by financial loss or bankruptcy, higher prices than necessary paid for goods and services, dreams and aspirations that go unfulfilled, and marital discord about money. The collective loss in dollars resulting from common financial errors is a big number.

“Improvement Paradigm” Outcomes- Instead of focusing on very specific financial goals (e.g., saving $1,000) as outcomes to measure the success of a program, focus on progress that people make over time. If they are moving the needle in the right direction and making small incremental progress steps over time, count that as a “win.” Achieving small financial successes can inspire people to go on to do bigger and better things.

FinTech is Not a Substitute for Financial Literacy- There is no shortage of fintech apps today to help manage your finances. For the most part, this is a good thing and they appeal to tech savvy young adults. Fintech is not a substitute for financial literacy, however. It is a compliment. People still need to understand basic financial concepts and skills such as reconciling a checking account balance and preparing a budget.

Youth Respond to “Right Now” Topics- Focus youth financial education around what they need to know today rather than their life in the future. Information will be more relevant and better received. That said, help young adults connect their present day decisions to future outcomes. One of the most important topics to teach teenagers is the awesome power of compound interest and long-term investing.

Avoid “No” and “Don’t” Language- It is human nature for youth (and adults) to rebel against, or tune out, warnings about things they are told not to do (e.g., invest in meme stocks or take out payday loans). A better option is to discuss pros and cons of various financial decisions and suggest suitable alternatives, if available. Also make personal finance “personal” using powerful stories and financial calculators.

Relatable Analogies- One investment analogy that I heard is that asset classes (e.g., stocks, bonds, cash assets, and real estate) are like food groups. Just like people need to have a combination of colorful foods during meals, so, too, investors need to have a combination of investments. People should neither have a plate of French fries every day for dinner nor put all of their money into one stock. Diversification is very important.

Adult Financial Education Impacts- Impacts mentioned on the Twitter chat included changing people’s misperceptions and aspirations. Many people do not fully understand the awesome power of compound interest to build wealth over time or think that they have to fund financial goals sequentially (Goal 1, then Goal 2, then Goal 3) instead of concurrently (save for financial goals 1, 2, and 3 at the same time). Many people also under-estimate the importance of small steps (savings, gaining financial knowledge) that add up over time.

Financial Struggles- Low- and moderate income households in “survival mode” struggle to get through the month paying for essentials such as food and housing. Others struggle with finding a job and “either/or” decisions e.g., saving or reducing debt with extra cash or deciding whether to invest or make extra mortgage principal payments. Another common struggle is deciding how much money is “enough” to retire comfortably.