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Why Financial Literacy Matters Now More Than Ever

During this difficult time, it’s especially important for people to feel they are in control of their lives, their finances, and their futures. I am a CERTIFIED FINANCIAL PLANNER™ practitioner and a Certified Personal Finance Counselor® professional with The Weber Group at Hefren-Tillotson. I understand financial uncertainty, at any time, is stressful and can upset a person’s financial and emotional well-being. 

As a former teacher, I educate my clients because I believe in the power of education, its power to acquaint the unfamiliar, and its ability to triumph over the unknown. I also proudly serve as Advisory Board President of The Pennsylvania State University, New Kensington. With help from a resourceful staff and motivated students, I pursue my mission to help build a culture of financial literacy education at the campus. Thus far, we’ve made tremendous progress.

Three Important Points We Address

The number one thing I approach students with is financial literacy in general: making sure they have the basic knowledge going into organizing their finances. Building a financial literacy knowledge base, and having the basic concepts down pat, is first and foremost. This leads me to the second important point: putting yourself first. Unfortunately, this does not happen all that often. So, invest in yourself first, because no one is going to do it for you. You must save for your own retirement.

The third thing to remember is: understanding your emotional state of mind. Emotions often drive people to make poor decisions. Fear and greed are two of the most compelling emotions. With greed, we want more and more. We might get too aggressive – like later on in retirement – when we should be more conservative.

With fear, which is in peoples’ minds right now, especially the fear of the unknown. When markets go down, people get scared and want to jump ship. Well, jumping ship doesn’t often lead to success. Investing is similar to a roller coaster. When we’re going uphill, we’re excited – that’s the fun part of the ride – but when it starts to go down, we need to hold on tight, stay in the cart and ride it out.

Anxious About Their Financial Futures

In the Investing for Young Women panel webinar, college students ranging in ages from 18 to 22 will participate in a completely safe, nonjudgmental, comfort-zone environment. We include an actual college student to hear her perspectives. It is interesting for me to hear the college mindset, and how they view things differently. They don’t know that this is a real opportunity for them and that they do have the ability to start investing. We start with basic knowledge, like understanding the difference between a stock and a bond, or a mutual fund. We don’t want them to jump into something blind, not knowing what they are talking about. We also don’t want them to procrastinate; being proactive is important. There are simple resources for them to begin investing, such as the Acorns app. For a minimal fee, they can begin investing by putting in a couple of dollars a week or a month. This gives them exposure to investing on a smaller scale, with the intention of working their way up to a brokerage firm.

Putting yourself first is so important to these students because they have a bigger concern than many other people: they may graduate college facing huge amounts of debt. I discuss not investing it all in an emergency fund, not paying off all debts, and not saving it all for themselves. This is a balancing act; you want to be doing a little of each while saving for the future. People mistakenly believe they cannot start saving until they pay off all their debts. Guess what? That might be when they are 40 years old!

No Financial Advice. Only Sound Advice

To help empower young women to make good choices, the After Graduation and Salary Negotiation portion of the webinars, are the money-earning potential parts of the conversation. As they start to go on interviews, they will focus on who will pay them the most money. However, some fail to consider the health benefits, stock options, or 401(k) matches that could be just as valuable as the salary.

We build in questions during our webinars so that our audience guides the conversation. This is important because we don’t know the knowledge base of the students participating. While we mostly stay surface-level, we will dig deeper if the knowledge base warrants it. By doing a quick “once-around-the-room,” it helps us gain a background of where these people are coming from. We never have a rigid script to follow, and we never know what question or comment will come up.

If someone asks me to explain what diversification is, for example, I will do that. We avoid anything that borders on giving specific financial advice. However, I will get into mutual funds, because target-date mutual funds are a great way to start out. Actually, mutual funds, in general, are a great way to put a portfolio together while also mitigating some of the risks associated with investing directly in stocks.

The overall progress we’ve made in the student atmosphere has been phenomenal. They are bright individuals with great futures ahead of them. And with the overwhelming amount of information out there, what and whom you believe as a client or a student is critical. The news can make it very difficult for you to invest properly. “Don’t get into the market because it is a very bad time,” they’ll say. And then, your emotions come in to play. That’s why you must educate yourself, and listen to what multiple sources say.

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

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.
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.