Financial Literacy Must Be Part of Career Development
We work and we earn money to build a decent lifestyle for ourselves and our families. As career development professionals we urge our students and clients to develop career plans based on their interests, abilities, and values. We rarely discuss how the career plan relates to money – in the short and long term.
I believe that money and how to manage it needs to be a large part of the career development and planning conversation.
The Federal Reserve recently came out with some statistics that should worry us. http://www.federalreserve.gov/econresdata/2013-report-economic-well-being-us-households-201407.pdf In surveying a representative sample of US households, it was determined that
- Education debt was held by 24% of the population.
- If the person was not able to complete the education program, they were forced to cut back on spending to pay for their student loans.
- Average debt differs by type of institution, but for a public, 4-year institution the average debt was more than $28,000. For those in debt, 34% indicated that the cost of their education outweighed the benefits.
- About 25% of the respondents had done no retirement planning and the same percent didn’t know how they would survive financially in retirement.
- 40% of those over 45 indicated that they will be working longer than planned due to the recession and lack of retirement planning.
So, as we encourage our students and clients to look to the future about their careers, we should be providing them with suggestions and resources to help them build a strong financial base. Among the many suggestions are:
- Consider the return on investment that is likely to come with the chosen postsecondary training. Can you obtain that education/training at lower cost institution?
- Be aware of the typical salaries for the chosen occupation. Is that sufficient for your personal and family goals?
- Check for the potential of upward financial progress in the chosen occupation. Is there potential for advancement?
- Once a job is landed, look into any retirement plans (like a 401K) offered by the employer and try to put in the maximum amount if possible. At the very least put in the amount that might be matched by the employer.
- Resist the temptation to spend as much as you earn or more. Getting into a financial hole may be very difficult to crawl out of.
- Save some part of your salary every month.
- Don’t borrow against your retirement savings as the tax implications may be challenging to deal with.
- Check your financial stability and progress every year.
There are several good resources that can help with budgeting and saving. Here are a few for your consideration.
Mint: A free tool that will help you understand how you are spending your money, and help you budget and stick to it. https://www.mint.com/t/hpntc/
AARP Retirement Calculator: Are you saving enough to enjoy retirement? http://www.aarp.org/work/retirement-planning/retirement_calculator/
Money Management International: This site has lots of free information including articles, lesson plans, and webinars that can help your students and clients understand money issues. http://www.moneymanagement.org/
Money As You Grow: Financial literacy advice for youth and young adults http://moneyasyougrow.org/
Federal Loan Repayment Estimator: Calculate it. http://www.collegefinancecenter.org/loan-calculators/federal-loan-repayment-estimator.html
Many banks and credit card companies have good resources and tools to help you save and stay on budget. Here is one example from Master Card. http://www.mastercard.us/tools-and-tips/index.html
Three CEUonestop.com courses relate to this topic. CEUonestop.com is an NBCC approved continuing education provider.
Winning Strategies for the Mature job Seeker
Helping Clients Redefine Retirement
Realistic Career Decision Making: It’s More Than Passion
Check out www.CEUonestop.com for details.