What is Financial Literacy?
- The ability to effectively evaluate and manage one’s finances in order to make prudent decisions toward reaching life’s goals
- The understanding of money, cash flow, Basic economic/financial concepts, debt/risk management
- 2 out of 3 households will probably fail to realize life goals
- Financial illiteracy is passed to the next generation
– Only 23% of kids surveyed indicated that they talk to their parents frequently about money, and 35% stated that their parents are uncomfortable talking to them about money
A picture of financial stress for many employees looks like this:
- See Little Way to Save 47%
- Consistently carry balances on their credit cards 45%
- Find dealing with their financial situation stressful 35%
- Reported their stress over financial issues increased over the last year 33%
- Find it difficult to meet their monthly household expenses on time
(Source: PwC’s Employee Financial Wellness Survey 2015. More recent data may alter this assessment)
Financial Wellness Programs are Gaining Traction
More than 35% of sponsors of large retirement plans (5,000+ participants) currently offer a comprehensive financial wellness program (beyond a standard 401(k) education program. 1 89% of companies were somewhat or very likely to expand their focus on the financial well-being of their employees in 2016. 2 Financial wellness programs not only help participants save for retirement and improve workplace productivity, but they can decrease related health care costs for employers. 2
(Sources: 1 PSCA’s 59th Annual Survey of Profit Sharing and 401(k) Plans. 2 Aon Hewitt)
Here’s the Problem with Money
There are a lot of things influence how we spend it and what we spend it on.
- Emotions – instinctive feelings
- Values – one’s judgment of what is important in life
- Culture – behavior characteristic of a particular social group
The 3-legged stool
This is where many people will get their money from in retirement.
- Retirement Plan (Defined Benefit/457 Plan)
- Social Security
- Personal Investing (Home, bank account, IRA’s, Life Insurance)
We Suggest You Focus on Your Budget and Priorities
- Cut expenses but pay yourself first
- Emergency funds and loans
- Sell unnecessary items
- Insurance and taxes
A Secure Financial Future Doesn’t Just Happen Prepare for your financial future now.
- Analyze the current situation
- Identify needs and goals
- Develop a sound plan
- Monitor regularly
- Adjust as circumstances evolve
The more time you have to prepare, the less you should have to worry about later.
This information has been provided for general informational/educational purposes only and should not be construed as tax, legal or investment advice. Please consult with your financial, tax, or legal professional regarding your specific situation.