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Plan Well, Retire Well

Saving and investing your money
MSW Secondary Date 2018

Money Smart Week: A Chance to Keep Up with Changing Realities


After over 20 years of teaching personal financial management, I am still looking for more ways to empower people to use money to reach their goals and dreams. As our economy, societal practices, and laws change, our approaches to financial management education need to change too.

In the past few weeks, our Extension office presented "Welcome to the Real World," a financial career simulation, to over 225 students from six different schools, with the help of over 35 volunteers. (Thank you volunteers!) This program has been around awhile and it continues to evolve with the times. Students still write a few checks for their purchases but we also teach about using debit cards and automatic withdrawals. I can imagine a day where we won't be teaching check writing anymore.

Our Money Mentor's Book Club is currently reading The Financial Diaries: How American Families Cope in a World of Uncertainty, by Jonathan Morduch and Rachel Schneider. Financial Diaries describes a research study, which collected detailed financial data from 235 low- and moderate-income households over the course of a year. The book focuses on the volatility of people's incomes and the variability in monthly expenses. For example, for more than five months a year, the average family's income was 25% above or below their median income. Wow! This has significant implications for how I teach money management skills related to budgeting and saving.

One of my favorite financial management strategies that I share with people is the usefulness of tracking their monthly expenses in order to see where there money is really going. Also, this strategy allows people to see if their spending aligns with what's important to them. I've been working under the assumption that most of the time their expenses are relatively consistent month to month; now I need to rethink that. Tracking expenses is still a good strategy; however, people may need to track expense for longer to understand their expenses.

While reading this book, I realized that I don't emphasize tracking income month to month. I am changing my teaching strategy on this now. Clearly, we need to have good data about our income flow as well as our expenses to develop a working spending plan.

What has changed in your money management practices that reflect our changes in our world? What do you need to learn about that's new in personal finance?

Money Smart Week is a great opportunity to learn new financial strategies. Money Smart Week is celebrated nationwide and likely in a community near you. Sponsored by the Federal Reserve Bank of Chicago, it is organized by local libraries, credit unions, banks, social service agencies and educational groups. Mark your calendars for April 21 – 28, 2018. All events are free and sales pitches aren't allowed. Check the online Money Smart Week calendar to find nearby events.



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