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I Started a College Savings Account because of Vault

Today we’re featuring a guest post from Nebraska student Diandra P who shares how Vault – Understanding Money™ helped her develop the skills and confidence needed to make smart financial decisions. Congrats to Diandra for being one of our scholarship recipients!

Diandra P

Student: Diandra P
Teacher: Jackie Hinrichs
School: Giltner High School
State: Nebraska
Sponsor: Nebraska Educational Savings Plan Trust (NEST)

Many people have dreams for the future. Some kids want to grow up to be doctors, while others want to be firefighters. Personally, I want to go to college in a big city and eventually work as an editor for a popular newspaper or magazine.

But how many of us actually know how to reach our goals? It can be pretty confusing trying to navigate the adult world of money and life-changing decisions. Luckily, there’s a program out there to help us achieve our goals. It’s called Vault – Understanding Money. Through Vault, I learned about making responsible money choices, as well as about income and taxes.

Vault taught me a lot when it comes to making smart financial decisions. I now understand the importance of saving my money and tracking my spending habits, which are both important skills I am using to plan for the future. I set up a savings account to help pay for college, and am practicing writing down everything I buy to control my spending. I feel great knowing that I am already a step ahead of the game when it comes to paying for tuition.

I also learned about all the different people I have available to talk to when I have a question about money. I took the advice of Vault and talked to my parents about money, and I’m glad I did. The more financial information I get, the more confident I feel about my ability to be be successful in today’s society.

In addition to learning how to make monetary decisions, Vault taught me about earning income and taxes. Besides all of the ways I can earn money as an adult in a few years, the program also introduced me to ways that kids like me can make money now. I’m funding the savings account I set up for college by detasseling and babysitting, and I’ve encouraged my friends to do the same. Working has proved very worthwhile for me. Besides the weekly paychecks I receive, my jobs have rewarded me with many new friendships, connections, and life lessons, which I’m sure will prove mighty useful in years to come. Of course, the creators of Vault knew that you can’t teach kids about means of income without also teaching them about the major responsibility that comes along with earning money – paying taxes. Vault showed me that it is very important for me to pay taxes so that our country is still beautiful and safe when I’m a hard working, prosperous adult.

Maybe I’ll change my mind within the next few years and decide that I don’t want to be an editor, and that’s okay. I’m just a kid; I don’t have to have my whole life figured out already. But there’s one thing I am certain about – I know that whatever I decide to do, I’ll be well prepared to achieve my goals because of Vault, where I learned about making educated financial decisions, earning money and paying taxes.

Financial Capability

The Evolution of Financial Literacy into Financial Capability

With Financial Literacy Month coming to a close, it’s time to ask an important question: should our industry be striving for more than just “literacy?”

In today’s world, we carry around a wealth of financial knowledge in our pockets. Our smartphones ensure that we’re never more than a few screen taps away from the answers to all of our questions. If you think about, carrying a smartphone is like having a bank or credit union branch in your pocket. Yet we’re still celebrating Financial Literacy Month like nothing has changed—when, in reality, a lot has changed.

Taken at its most basic definition, literacy is the ability to read and write. And while an understanding of financial products and terminology may have been a worthy goal for bank and credit union customers in the past, the bar needs to be raised for a world of technology and complex financial decision-making.

Tune in to our webinar on April 25th, 1-2pm ET to hear more on why your bank or credit union should focus on financial capability this Fin Lit Month.

Tune in to our webinar on April 25th, 1-2pm ET to hear more on why your financial institution should focus on financial capability this Fin Lit Month.

A Brief History of Financial Literacy

The first acknowledgement of a need for financial literacy might be this letter from John Adams to Thomas Jefferson in 1787 (since we at EverFi are in Washington DC, we love this kind of historical reference). However, the term itself wouldn’t start to gain popularity until after the 1914 passage of the Smith-Lever Act, which focused on providing citizens with necessary learning experiences, including financial education.

For the majority of the 20th century, financial literacy continued to be a relevant term. But most financial educational tools were text-based, so absorbing this knowledge involved a lot of reading and writing. As it did for many industries, technology soon changed everything.

Smartphones Change Everything

On January 9, 2007, the very first iPhone was announced, and everything changed. Now, people can get the knowledge they need quickly and easily; anything you want to know can be found in seconds. And with more information available, people are able to do more research before making important decisions.

Beyond access to knowledge, smartphones also give people the ability to take action from the palm of their hand. They can read Amazon reviews to research a product, then purchase it with a single click. They can download their bank’s app and have access to financial education, then put that education to use right away by making changes to their accounts. These interactions go well beyond simply becoming literate; instead, smartphones allow users to achieve proficiency and take immediate action.  

Moving Beyond Financial Literacy to Financial Capability

Consider a customer who is aware of both bank services and check-cashing services—the latter of which can be predatory, tacking on huge service fees. The customer already has the financial literacy to know that each option exists. But to achieve true financial capability, this hypothetical customer needs the confidence and strategic attitude to make the connection that a banking product would be a better choice for their long-term financial health.  

That’s why we think it’s time to replace financial literacy with a more impactful term: financial capability. Financial capability is the set of knowledge, attitudes, habits, and confidence in one’s ability to control one’s finances that a consumer needs to build his or her financial wellbeing. In other words, it’s not just a matter of being literate about your financial options—it’s having the capability to use that literacy to make good decisions.

In order to change the conversation surrounding financial education standards, we need to change the industry expectations. So, in April 2018, let’s not celebrate Financial Literacy Month anymore. Instead, let’s raise the bar.  Let’s plan a big, impactful, and action-oriented month.  Let’s have Financial Capability Month.

P.S. – Download our mini guide, Developing Financial Capability Across Every Stage of Life: Why Financial Education Should Start Early, to learn how your financial institution can improve its financial education initiatives.

EverFi CEO Tom Davidson Featured on Bloomberg TV

On Wednesday, April 8, EverFi CEO Tom Davidson served as a guest host on Bloomberg’s Surveillance television program.   In the midst of Financial Literacy Month, you bet we were excited to have Tom talking about the importance of financial education and empowerment.

Tom BloombergA key point that Tom brought up was that engaging students early with financial education can have a long-lasting impact on their future actions and behaviors.  This was echoed in the results of a 65,000 student survey that we partnered with HigherOne on recently.

The survey found that students who took a financial education class in high school performed better on the survey’s financial knowledge questions, were found to be more averse to debt, more likely to pay credit card bills on time, and less likely to go over their credit limit.  Those with some financial education also displayed superior levels of knowledge and conscientiousness around money.  The survey report is available at http://moneymattersoncampus.org/

Tom’s Bloomberg interview is available here.

Dispelling Myths About Teens and Money [Infographic]

The research is clear. Teenagers in the U.S. consistently demonstrate difficulty with successfully negotiating their finances and planning for future economic goals. However, the current investigation revealed that youth acknowledge the critical role that their parents and other adults play in mitigating some of this difficulty. Our research also found that many commonly held negative beliefs about teens, finance and parental impact run counter to how teens actually feel.

Whether intended or not, parent’s and other adults are on the front lines in helping shape key finance-related attitudes and behaviors in their children.

Download the latest EverFi Insight Report to learn more about the study.

Take a look at our latest Infographic:

Making Sense of Money on College Campuses

Emily Hester

Helping dollars make sense on a college campus isn’t easy, but it is vitally important. For staff at Louisiana State University in the Student Financial Management Center, we want students to not only be retained and to graduate, but we want to help equip them with the tools they need to be successful in the “real world” and we know that a big part of that comes from financial and money management education.

Student DebtFour years ago, one-third of LSU students identified their current financial situation as always or often stressful. What we know is that if a student is stressed about his or her finances then focusing on academics and other pieces of the college experience become exponentially more difficult. So, knowing the problem – we are working toward a solution. At LSU, this starts Day 1, or in reality Day 0 in their life as a LSU tiger. During each orientation session, incoming LSU students are educated about financial literacy and keeping a budget while they are students. Through teaching them about the resources and the reasons for overspending, we are trying to tackle the problem of lack of financial education head-on. This also comes with a focus on first year students. In partnership with First Year Experience, the LSU SFMC created a five-part series called First Year Finances helping students learn how to earn, spend, save, and repay money.

Money_Matters

Click for Full Infographic

In addition, we spread the word of financial literacy through presentations to courses, student organizations, Greek organizations, and in the residence halls. Bottom line, if a group will let us talk to students about the importance of money management – we make ourselves available. However, probably the most intimate way we are helping teach financial literacy is through our one-on-one appointments. In the one-on-one setting we are able to help a student create a budget using their financial history and behaviors and answer questions specific to the student. We have found students to appreciate the one-on-one attention. Following an appointment one student said, “The staff in the SFMC was very warm and understanding of a typical college student’s financial woes. Whether you’re just entering college, or about to leave campus for the big, scary world, I felt confident that the advice she was giving me was not only helpful, but would be easy to implement and follow so that I could be financially stable during this scary time.“ We believe our background in student affairs helps us to better serve LSU students and help put financial concepts in easy to understand language.

Last, and certainly not least, the Student Financial Management Center focuses a significant amount of time and resources to sending students to resources on the web. We recognize that we cannot touch every student in person, but we do have the opportunity to reach thousands of students through the internet.

Finally, this year LSU took the leap into implementing Buttonwood: The LSU Financial Literacy Challenge for all first year and transfer students. For the first time in the four years of our existence, we have been able to educate the large mass of first year students having a completion rate of over 62%. Only time will tell what this means for LSU students, but we are excited for the potential to come in educating LSU students regarding financial literacy. Geaux Tigers!

FinLit Month

Financial Literacy Month

Financial Literacy Month – Shout it from the Mountaintop!

Here at EverFi, we wish Financial Literacy Month were year-round. With EverFi team members working day-in and day-out with students and families across the country, we see the lasting consequence that can result from limited financial knowledge. In a survey conducted with over 20,000 high schoolers, 60% reported that they were worried about money…this is in high school. The stress only grows from there. 79% of college students state that they frequently worry about their debt.

Having a month when everyone – companies, educators, and local leaders – can come together to help educate people in their communities, is what keeps our team motivated year-round. Since the start of April, we’ve seen thousands of teachers, politicians, business people, deans, parents and students stand up do their part to make Financial Literacy Month important and impactful, improving the lives of countless students.

Fueled by this groundswell of effort from across the county, we wanted to do our part to spread the message about the value of quality financial education. EveFi Co-Founder, Ray Martinez, was presented the opportunity to go on national TV and he brought one message share…everyone has a role to play in preparing students for their financial futures and now is the time to make a difference.

View Ray on Bloomberg TV discussing Financial Literacy Month:

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Education – A Financial Necessity

Spencer_Kiper_Bio

I’d like to think that some form of financial literacy has always been a staple subject taught in the modern American school. However, with the growing epidemic of recent college graduates entering the workforce with unprecedented levels of debt, it’s apparent they are not getting all the necessary financial preparation. Financial know-how is key in helping students weigh decisions on student debt and manage loans responsibly, ultimately giving them more options in our demanding economy.

Teaching the modern student requires a modern approach. In my classroom, a blend of both traditional instruction and interactive technology-based materials has proven far more engaging, and effective. With seemingly endless resources, traditional instruction materials were easy to develop and incorporate into my middle school career-preparation business classes, but finding ways to incorporate rigorous, technology-driven, engaging content proved to be more difficult…until I discovered EverFi.

Students with CertificatesGraduating from high school in 2006, I cannot recall a course that encompassed all of the concepts bundled in the EverFi Financial Literacy Program. This left me to pick up financial basics through a handful of  high school courses and extend the rest of my learning into college, where I was already making many impactful and lasting financial decisions. Had I known about the impact of interest, credit scores, and consumer fraud (yes, I have been of victim) before interacting with them in the real world, I could have saved myself a lot of time and money. As a teacher, I am determined to offer my students the opportunity to not just learn about financial literacy, but allow them to role-play these decisions and experience the associated outcomes in a safe and realistic environment.

Through simulation and gameplay, EverFi has enabled me to offer this learning environment to each of my students and the impact has extended beyond our classroom. Our community is thrilled. I often hear comments like, “I wish I would have had that in school!” and “It’s about time they started teaching that!” from my parents and members of my community. It tells me that incorporating EverFi into my class was definitely a step in the right direction.

I am doing my part to ensure my original assumption is true…financial education is a staple subject at my school!

FinLitMonth

Value of Financial Literacy

Ask A Banker: The Value of Financial Education

kim_gb

Balancing a checkbookWhile still in high school, I started my banking career more than 12 years ago as a part-time teller. I had a checking account since I was 14, balanced it regularly, so I naturally assumed I would be a pro at banking…

Boy, was I wrong!

I remember being overwhelmed with the dynamics of the banking world and the terminology of numerous bank products and services. CD ladder vs money markets. Credit cards vs debit cards. Home equity loans vs lines. I was an “adult,” yet quickly realized, I had little actual experience with many financial terms and products. Fortunately, I had a great manager who coached me and helped me understand that banking is much more than a checking account with a neat debit card!

Now, More Than Ever

Our country has experienced damaging blows to the economy recently. As a seasoned banker, I see how it affects many families. In my opinion, some this could have been prevented, or perhaps minimized, if someone had taken the time to teach young adults lessons on the complexities of the financial world. Lessons that money does not grow on trees, yet there are products and tools that can help grow savings. Lessons on how to avoid making big financial mistakes that can take years of recovery.

My parents were hard workers who lived paycheck to paycheck. There were some struggles. I assumed it was because they didn’t make a lot of money. I now see it differently. Though great people, my parents didn’t have the knowledge to manage their finances and plan for their future the way that they could have.

ComputerIt’s my goal, as a banker, to reach as many people as possible, and teach them how to manage money, create a budget and plan for the future. It’s my goal to help individuals understand the products and resources my parents were unaware of to plan for a new home, car, retirement and life’s surprises.

I love that Everfi supports this vision and gives me the opportunity to connect with young adults in my community. I recently attended an Everfi kickoff at Liberty High School and met great teachers with the same passion for financial literacy. I look forward to returning to celebrating the success of these students when they complete their course and hear their takeaways; I look forward to see them take steps now towards a financially sound future.

FinLitMonth

Preparing for the Test…of Life

Susan_b

Financial Literacy EducaitonI’ve been teaching for quite some time and when I’m often asked what I teach. The exchange always goes something like this:

“What subject do you teach?”

“I teach financial literacy”

Immediately followed by, “What’s that?”.

I have few versions of the response, “Well, it’s how to take care of your money, like understanding banking, credit cards, renting apartments, getting insurance, paychecks and taxes, and the list goes on..”

Their response, ”I wish they had taught that when I was in school!”

Consumer economics classes have been around for a long time, but it seems that today’s economy highlighted its importance to the general public. I was brought up with an the old school way of thinking where the man of the house handled the money, but in today’s society, every person is tested day in, day out on their financial competency.  It’s a critical skill. Money management needs to be an individual responsibility, handled in your own way. From children learning to manage small amounts of money to the adults who share in financial decision-making for the family, building financial literacy is a life-long pursuit.

We hear more and more about the expected outcomes of education, many observers noting how our schools are falling short. No school system is perfect but there are many great examples of ways we are serving the needs of the modern student. Financial literacy is a topic that does not have a state mandated testing requirement and, in most states, is not a required course, but it teaches life skills that are very necessary for our students. I tell my students that they may never quote Shakespeare or use the Pythagorean theorem after they finish school, but they will use every bit of what they learn in financial literacy class for the rest of their lives. I’ve seen the skills taught in my classroom applied in the “real world” and it serves as a reminder that we must prepare our students for success both in and outside of the classroom.

The Path to Financial Literacy…2.0

NY Stock ExchangeOver 17 years of teaching financial literacy, I’ve found that learning about money management can be boring if it’s not done right. I’ve spent a lot of my time trying to make it interesting and relevant to my students. I’ve always been fascinated with employing technology in my classroom and began using online resources as soon as a computer lab became available. I was introduced to the EverFi Financial Literacy Platform a few years ago and immediately knew this would both educate and engage my students. After I began using it with my class, I was very pleased with the results. The students were genuinely focused on the modules and enjoyed the innovative approach. All would be well if I had regular access to computers for my students, but since my course is an elective I’ve got low priority in booking computer lab time.

After searching for 7 years, I was able to secure grant funding to get a mobile computer lab for my classroom. With easier access to computers, I am working to reach 100% certification from my current students. We are in the middle of the program, but I have a good feeling about our certification levels for this semester!

The Age of Context

With digital learning on the rise, it’s important to make sure that our students are guided toward using technology for learning. They are incredibly adept at using technology for entertainment, but they need to develop habits using it as a resource to support critical thinking. Every student can” google” an answer, but once that is done, it’s our role as educators to encourage them to contextualize and synthesize the information. In “googling” financial literacy education materials for my class, I received  thousands of hits, but the critical step is determining what blend of resources met my students’ needs.

It seems that financial literacy is a hot topic. Everyone with money to spend has a suggestion and their own version of the best way to become financially literate. It can be overwhelming to get through. The EverFi Platform has helped cut through the noise. Integrating this platform into my curriculum has allowed for topics to be covered with personalized feedback and a blend of both instruction and assessment.

At the start of my class, I have to explain to my students the importance of financial literacy. By the end, they are excited to become EverFi Certified in financial education! They’re proud of their achievement and I’m proud of them.

FinLitMonth

The Most Important College Freshman Class Isn’t Being Taught…Yet

Stephanie
In the first month of my freshman year of college, I had three main questions driving my life:

  1. What are my plans for the weekend?

  2. Are my roommates crazy?

  3. How am I going to decide what to major in?

Fast forward four years, and I have a diploma in hand grappling with an entirely different set of questions:

  1. How am I going to pay for rent?

  2. How am I going to start repaying my loans?

  3. How am I going to afford to keep myself alive?

So there’s an obvious gap between the priorities of a college freshman and the priorities of a college graduate, and understandably so. Living in a college bubble where real-world expenses aren’t yet a priority means that managing money isn’t a priority either. But there are plenty of moments during college when the right financial information and making good financial decisions will seriously impact a student’s financial future.

Student DebtIt’s especially true when it comes to borrowing money to pay for school expenses – and it’s what happened to me when I was in college. I wasn’t aware of (and frankly, didn’t care about) the amount of money I was borrowing to cover tuition, room and board and the other daily expenses of college life. And it’s part of the reason I graduated with $30,000 in debt (the majority of which was avoidable).

I needed a wake-up call in college; some basic level of education about managing my money; a class or a course where I was forced to acknowledge the financial decisions I was making, take a good hard look at the consequences, and change course.

This generation faces an unprecedented challenge: in 2011, U.S. student loan debt passed the $1 trillion mark, overtaking total credit card debt for the first time in history; the average student debt load is over $25,000. All this means there’s a continuing trend of students borrowing for college and graduating with an obscene amount of debt.

It means that financial education isn’t just a good thing for the typical college student – it’s critical.

Buttonwood_ScreenshotThis is where the college can step in. While it’s not the job of a community college or a four-year university to monitor or intervene in a student’s spending and borrowing habits, it is a school’s job is to cultivate a cohort of students that successfully graduate and move on to fulfilling and stable careers.

So just how does a school begin teaching personal finance to college students? Here are a few ways that colleges and universities can integrate financial education into the college experience:

  1. Use a platform that’s easy to deliver and easy to track: It’s hard to come up with the resources to require every first-year student to take a basics life skills lecture (as much as they may need it). So the solution to providing financial education at scale is technology. Using a platform like EverFi’s Buttonwood – Personal Finance and Student Loan Management course let’s school administrators deploy financial education to a large number of students and track student progress, knowledge gains and positive financial behavioral change.
  2. Integrate into everyone’s student experience: Even if a first-year student doesn’t have loans now, it doesn’t mean she won’t in the future. An entire campus or cohort of students should receive financial education instruction, not just the groups of students that “need it.”
  3. Tie it to critical transition and financial moments: Research suggests that the “just-in-time” financial education is the most effective way to promote positive financial decisions. Simply put, the best time to teach financial decision-making skills is in the moment of a major financial decision. Tying financial education to critical moments like the beginning of freshman year or when the student receives student loan entrance and exit counseling helps the lessons stick and promotes thoughtful financial decision-making.

Even with a personal finance course on campus, college freshmen will still be focused on questions about how to make new friends and how to manage their class schedules in the first month of school. But with right kind of financial education early in the college experience, we can hopefully add another question to their list: How do I set myself up for success for the rest of my life?

FinLitMonth