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Financial Literacy and its Impact on Women

Financial literacy should begin in our schools as early as possible. It is my opinion that, regardless of age or gender, all young adults should know how to use and manage money. This includes spending, budgeting, saving, banking, charging, paying down credit card debt, monitoring their credit score and more. In fact, Robert Weagley, professor of the personal finance department at the University of Missouri, says teachers should get certified before they’re allowed to teach the subject.

At college level, students don’t fully grasp what they’re getting into in the real world so they are disadvantaged from day one. They enter the workforce saddled with thousands of dollars in student debt, embarrassed by it, and then must devise a plan to pay it back. Teaching these young adults how to manage money is a precursor to their future success. Knowing even the basics can be a step in the right direction. 

Fast forward to the newly married graduates. When they dole out their spousal responsibilities, the husband will likely control the finances and investments. Wives who have achieved financial literacy will collaborate with their husbands in this duty. Regrettably, those who haven’t achieved financial literacy could be at a disadvantage that might negatively impact their lives later on, unless they acquire the financial knowledge they need. Then, they can guide themselves.

Perhaps you’ve heard that “a man is not a plan.” Well, it’s true. As an educator for nine years, prior to becoming a financial advisor, I am passionate about teaching women and students to move ahead toward better lives on their own.

It starts with public awareness

Currently, 56% of college students are women. As of 2017, these women were between the ages of 18 to 24. For every 100 men who earn a master’s degree, 167 women also earn one. Women also earn 80% of doctoral degrees. These are bright individuals. Unfortunately, financial awareness is absent in many homes and financial education is absent from most school systems, according to the National Financial Educators Council.

As President of the Advisory Board for the Commonwealth Campus of Penn State, New Kensington, I recognized the lack of financial literacy in women and college students early on in my career as a financial advisor. I made it my personal mission to determine how to better teach financial success and responsibility.

When I initially contacted University Park, I learned they had an endowment to support and expand a financial literacy center.  Much work has been done at University Park, and we are growing that effort to include the Commonwealth campuses.  We are developing a pilot program at our New Kensington campus.  This program will create a model that will be presented to the other 22 Commonwealth campuses in order to establish the financial literacy mission across the whole of Penn State.  Along the way, I teamed up with Junior Achievement, who also teaches financial literacy in elementary classrooms.  

Some experts argue that lessons on lending and credit are just as important as English or science classes and the only chance to reach every child before he or she goes on to make life-defining financial decisions.

After graduation, when they’re all going to their full-time jobs, graduates must understand what a 401(k) is, for example.  They need to know how and why to start saving up to the max because of compounding and dollar cost averaging is the pathway that can lead to financial stability, independence and a comfortable retirement.

Women are three times more likely to fail the financial basics exam

Sad but true, but it’s never too late to learn the basic investments: stocks, bonds and mutual funds, which is exactly how I begin my seminars for women. I also cover retirement plans, Social Security and saving for education – not only because they are mothers, but they, too, can learn to save for their own educations. And everyone who attends creates a budget to see what’s coming in and what’s going out.

We know that lower levels of financial literacy among women will likely impede their ability to accumulate and manage assets, and secure a promising financial future. The basic problem is they don’t know what they don’t know until they don’t know it. Sure, it is difficult for some women to take hold of this – they are used to putting their family first and themselves last.  As a result, they’re generating around $16,000 less in retirement. Even worse, this lack of knowledge and lower income results in 3 out of 4 people who live in poverty over the age of 65, to be women.

For me, financial literacy began at home

My first teaching job was at 22. I walked into a room filled with teachers for an in-service session. A man walked up onto the stage, a financial advisor, and started talking about 403(b) plans, pensions and retirement. It was like, ‘blah, blah, blah,’ and most of us had no idea what he was talking about. It was sad, actually.

When he finished he walked off the stage, went out the back door, and we didn’t see him again until next year when he did the exact same thing again! But the first time, I was thinking: “Why is he talking about this? I am only 22 years old!”

Luckily, my dad, Al, was at home to explain it to me. So with my very first paycheck, I took a big chunk out of it and put it in my 403(b) plan. I knew that if I didn’t see that money, if it didn’t exist, I could learn to live very well without it. Dad is the core of my financial literacy, my mentor, why I became an advisor, and my motivation to work with him in The Weber Group, which I am blessed to do.

I want to work hard, to pay it forward, and educate as many women as I can through my seminars and webinars. It was so enlightening to see a high school student attending one of my seminars with her mother recently. That’s when people need to get this information! Of course, we have successful local businesswomen who also come to learn. Women of all ages can embody the principles that I refer to: 

·         Become financially literate for yourself

·         Put yourself first

·         Understand the basics

·         Don’t rely on anybody else 

·         Take control of your own life

·         Guide and live your life the way you want to live it 

If you would like to change your life and get on the road to financial literacy, please attend one of my seminars or webinars. I would love to meet and talk with you!

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Hefren-Tillotson Inc. is a leading diversified financial services firm providing investment and retirement plan management and comprehensive, financial planning through MASTERPLAN® for individuals and businesses. The firm’s wealth management services are administered by Certified Financial Planner (CFP) professionals, Chartered Financial Analyst (CFA) Charter holders, attorneys, Chartered Life Underwriters, and CPA/PFS’s. Hefren-Tillotson offers corporate services including 401(k) retirement planning, executive financial counseling, fiduciary reviews and workplace financial planning seminars. Founded in 1948, the firm is headquartered in Pittsburgh and has offices located in Pittsburgh, Butler, Greensburg, North Hills, and South Hills. MEMBER SIPC.