what young adults need to know about money
DESCRIPTION
What Young Adults Need to Know About Money is a 90 minute panel discussion presented by Bill Cheeks, Dr. Joyce Serido and Dr. Shelley MacDermid Wadsworth on behalf of the Military Families Learning Network. This panel discussion addresses the concerns of young working adults, college students and young enlisted Service Members.TRANSCRIPT
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Welcome to the Military Families Learning Network
Panel Discussion What Young Adults Need to Know About
Money!
This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family Policy, Children and Youth, U.S. Department of Defense under Award Numbers 2010-48869-20685 and 2012-48755-20306.
This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family Policy, Children and Youth, U.S. Department of Defense under Award Numbers 2010-48869-20685 and 2012-48755-20306.
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Resources, slides and more information available: https://learn.extension.org/events/1558#.U36Otq1dXrU!
Panelist: Bill Cheeks!William “Bill” Cheeks is President of ABBA Associates Inc., a fiscal management consultant. Bill is a consultant to the Jump$tart Coalition for Personal Financial Literacy and, in that capacity, serves as Regional Consultant, Eastern States, assisting and advising Jump$tart state coalitions in the region. !
Panelist: Dr. Joyce Serido!Dr. Joyce Serido is an Assistant Research Professor at the University of Arizona’s Norton School of Family and Consumer Sciences/Take Charge America Institute and is the Principal Investigator for the Arizona Pathways to Success Transition to Adulthood initiative.!
Panelist: Dr. Shelley MacDermid Wadsworth!Dr. Shelley MacDermid Wadsworth is a Professor and Director of the Center for Families and the Director of the Military Family Research Institute at Purdue University. Over the past 20 years, her research has focused on the relationships between work conditions and family life. !
Jump$tart® Coali@on for Personal Financial Literacy
An independent, non-‐profit coali@on of more than
150 na@onal organiza@ons and en@@es.
Ø Non-Profit Organizations Ø Educational Institutions Ø Financial Associations Ø Corporations Ø Government Agencies
Jump$tart National Initiatives Standards and Benchmarks
3rd Edi@on, 2007
Jump$tart Coali@on for Personal Financial Literacy
National Standards in K–12 Personal Finance Education With Benchmarks, Knowledge Statements, and Glossary
Substantially Revised in
2007
Benchmarks for 4th, 8th and 12th Grades
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Ø Virtual Library
Ø 750+ resources
Ø Many free
Ø Reviewed against standards
Ø Updated annually
Jump$tart State Coalitions
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Omni Hotel
ARIZONA PATHWAYS TO LIFE SUCCESS FOR UNIVERSITY
STUDENTS (APLUS) Joyce Serido, Asst. Director & Research Professor
Take Charge America Ins@tute University of Arizona
June 5, 2014
Funding for this study provided by the Na5onal Endowment for Financial Educa5on (NEFE) and the Ci5 Founda5on
Copyright @ Take Charge America Ins?tute 2014
Copyright@APLUS Take Charge America Ins?tute, 2014
SOCIALIZATION • Financial paren?ng
is key influence
• 1.5 ?mes that of financial educa?on
• 2 ?mes that of their friends
Copyright@APLUS Take Charge America Ins?tute, 2014
COGNITION
3%
11% 14%
CUMULATIVE EFFECTS OF FINANCIAL EDUCATION Copyright@APLUS Take Charge America Ins?tute, 2014
FINANCIAL SELF-‐AWARENESS
3.5
4.5 4.0 3.7
4.6 3.7
Perceived financial efficacy
Perceived financial control
Posi?ve financial aStudes
Wave 1 Wave 2
Copyright@APLUS Take Charge America Ins?tute, 2014
FINANCIAL BEHAVIOR
2
3
4
Wave 1
Wave 2
Copyright@APLUS Take Charge America Ins?tute, 2014
FINANCIAL BEHAVIOR AND WELL-‐BEING
2
2.5
3
3.5
4
4.5
Financial Sa?sfac?on
Life Sa?sfac?on
Psychological Well-‐Being
Physical Well-‐Being
Poor Low Average High Copyright@APLUS Take Charge America Ins?tute, 2014
Financial Parenting
Work Experience Education
Financial attitudes
Perceived financial control
Financial efficacy
Saving Budgeting Investing Tracking
Ini%ate Improve Promote
Subjec@ve financial knowledge
Objec@ve financial knowledge
Socializa@on
Cogni@on
Self-‐Awareness Behavior
Well-‐Being
Financial Physical Psychological Life Satisfaction
FINANCIAL CAPABILITY DEVELOPMENT
Copyright@APLUS Take Charge America Ins?tute, 2014
WHAT IS “FINANCIAL CAPABILITY”?
• Knowledge and competencies [rela?ve to personal finance], ability to act on that knowledge, and opportunity to act (Johnson & Sherraden, 2007)
• The ability to make good financial decisions in their own behalf (FINRA, 2009)
Copyright@APLUS Take Charge America Ins?tute, 2014
PROMOTING YOUNG ADULTS’ FINANCIAL CAPABILITY
Strategies for
Copyright@APLUS Take Charge America Ins?tute, 2014
PERSONAL FINANCE IS…PERSONAL • Personal goals and values -‐ the founda?on of
personal financial style • Financial style -‐ the way you approach financial
choices – Financial style comes from self-‐understanding and self-‐
expression
• There is a “cause and effect” inherent in financial choices
Copyright@APLUS Take Charge America Ins?tute, 2014
FIRST STEP TOWARD FINANCIAL CAPABILITY
Awareness • Personal goals, values, aStudes • Financial prac?ces (what one can do) • Financial knowledge (understanding how financial
services work)
Copyright@APLUS Take Charge America Ins?tute, 2014
FINANCIAL LEARNING IS ONGOING
• Financial decision-‐making is a daily event • Individual understanding evolves • Prac?ce making financial choices
Copyright@APLUS Take Charge America Ins?tute, 2014
SECOND STEP TOWARD FINANCIAL CAPABILITY
Relevance • Financial well-‐being is a personal assessment of
sa?sfac?on with one’s finances. • Financial well-‐being contributes to quality of life • Financial well-‐being emerges from managing your
resources well • Financial well-‐being ≠ wealth
Copyright@APLUS Take Charge America Ins?tute, 2014
PROACTIVE COPING PROMOTES WELL-‐BEING
Proac?ve coping involves: • Star?ng with a goal or purpose • Gathering informa?on (mul?ple sources) • Evalua?ng informa?on • Making best choice (for you)
Copyright@APLUS Take Charge America Ins?tute, 2014
THIRD STEP TOWARD FINANCIAL CAPABILITY
RESPONSIBILITY • Invest in yourself • Career planning is one of the most important financial
decisions you will make • Things change… things are always changing
Try it…see what happens…adapt
Copyright@APLUS Take Charge America Ins?tute, 2014
Questions!!!!
Please enter your question in the chat box! - or Tweet your question using #MFLNPF!
What Young Military People Need to Know about Money
Shelley MacDermid Wadsworth June 5, 2014
Today, Enlisted Average Military Compensa?on Exceeds Earnings of Most Workers with High School
Educa?on
Civilian earnings are for full-‐?me, full-‐year male workers star?ng at age 20 Thanks to James Hosek for this slide
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
0 2 4 6 8 10 12 14 16 18 20
Annu
al earnings (2013 $)
Year of service
Males with High School: 2011
p_90
p_80
p_70
p_50
RMC
Officer Average Military Compensa?on Exceeds Pay of Most Workers with Bachelor’s Degree
Civilian earnings are for full-‐?me, full-‐year male workers star?ng at age 24 Thanks to James Hosek for this slide
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
0 2 4 6 8 10 12 14 16 18 20
Annu
al earnings (2013 $)
Year of service
Males with Bachelor's Degree: 2011
p_90
p_80
p_70
p_50
RMC
Military Wives Have Lower Labor Force Par?cipa?on and Earnings Than Comparable
Civilian Wives • Labor supply
– 9 percent lower labor force par?cipa?on rate – 6.4 fewer work weeks among labor force par?cipants – 10 percent less likely to work 30 or more hours a week (“full-‐?me”) – 14 percent less likely to work 33 or more weeks a year (“full-‐year”) – 14 percent less likely to work both full-‐year and full-‐?me
• Earnings – 13 percent lower if work part-‐?me – 14 percent lower if work full-‐?me
• These differences may reflect both – Preference for less par?cipa?on and work – Fewer employment opportuni?es and lower wage offers
Based on regression analysis of American Community Survey data for 2005-‐2011, controlling for age, educa?on, year, whether federal employment, whether spouse is a veteran, and weeks worked (in earnings regressions)
Labor Supply and Earnings Differences Imply Average Annual Earnings 20
Percent Lower Military wife
Comparable civilian wife
Percent difference
Earnings by whether working part-‐?me or full-‐?me Part-‐?me $9,037 $10,352 -‐13% Full-‐?me $31,116 $36,325 -‐14% Percentage working full-‐?me among those working
75% 83% -‐14% Overall average earnings among those working
$25,723 $32,112 -‐20%
Drawing together findings so far: Military spouses’ lower earnings par%ally offset the higher earnings of service members, plus military families have zero-‐cost health care
‘Can’t make ends meet’ or ‘In over our heads’ Junior Enlisted Service Members
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2002 2009 2010
Individual Financial Problems
Overall Financial Condi?on
Source: 2011 Family Readiness Report to Congress
‘Can’t make ends meet’ or ‘In over our heads’ Military Family Life Project Mothers
2010
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Preschool School Age High School None
Financial Problems Are More Common in Families Where …
• Service members are in pay grades lower than O4 • Spouses are unemployed • The family had a hard ?me readjus?ng to the service member’s presence following return from deployment
• Service members have been wounded in ways that interfere with family life
• Someone in the family has special medical or educa?onal needs
Data Source: Military Family Life Project 2008
Financial Problems Are Less Common in Families Where …
• Money is put aside each month • There is $500 or more in emergency savings
• Social support is higher than average • The service member is female • The family is enrolled in the Excep?onal Family Member program
Data Source: Military Family Life Project 2008
Conclusions • Service members’ compensa?on is higher than that of comparable civilians
• Military spouses work and earn less than civilian counterparts, par?ally offseSng service members’ higher compensa?on
• Military service provides extensive family supports rela?ve to civilians
• Financial condi?ons have improved in recent years, but this is now slowing
Questions!!!!
Please enter your question in the chat box! - or Tweet your question using #MFLNPF!
Resources!
• Arizona Pathways to Life Success!
• Jumpstart!• Jumpstart Clearinghouse!• The Military Family Research
Institute at Purdue University !!
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Personal Finance Twitter Cohort!A 2-week learning experience beginning June 9 presented by the MFLN Personal Finance team and the Network Literacy Community of Practice.!!• Become a part of a community of learners that will
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Next Personal Finance Webinar!Small Steps to Health & Wealth!• July 29, 11 a.m.-12:30 p.m. ET!• Speaker: Dr. Barbara O’Neill!• 1.5 CEUs for AFCs!• For more information:
https://learn.extension.org/events/1625#.U36U8K1dXrU!
Military Families Learning Network"
This material is based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture, and the Office of Family Policy, Children and Youth, U.S. Department of Defense under Award Numbers 2010-48869-20685 and 2012-48755-20306.
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