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.

  1. Retirement Plan (Defined Benefit/457 Plan)
  2. Social Security
  3. 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.

Securities and advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC. Focus on Finance Literacy, LPL Financial and Prudential are separate entities. This presentation was created for educational and informational purpose only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational presentation.