Financial Literacy Feed

financial literacy

The AICPA and its members continue to be at the forefront of the financial literacy movement with free programs, resources and thousands of CPAs across all 50 states volunteering to help Americans with their financial understanding.

 

 

 

 

 

 

 

 


 

How to Build Your Back-to-School Budget

Back to SchoolEven though the beach is still calling, it’s almost time for students to think about the days when they’ll be loading up their backpacks, charging those computers and setting alarms for earlier than 10 a.m. – because the new school year will be here before you can say ‘fall semester.’

If that sound stressful to you, you’re not alone. On top of all the stresses associated with learning new material, meeting new people and challenging yourself intellectually, there is also a significant financial cost associated with the start of a new academic year. Regardless of whether you’re a parent thinking about your children’s back-to-school budget, a college student living away from home, or a full-time worker attending night school, the challenges are similar.

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Where Will You be Financially in 40 Years?

Fin Lit gameWhat sounds more appealing to you – reading a bunch of boring facts online or playing a game to learn the same exact thing? You’d probably choose the latter. In fact, research shows a majority of millennials see clear benefits from playing digital games. Two in three (67 percent) say that games are important in helping them to learn how to create winning strategies and 7 out of 10 (70 percent) feel it aids them in learning how to solve problems. The proof is in the pudding, as they say – and that’s where gamification and personal finances come into play (literally!).

Today, the AICPA and the Ad Council launched a free digital game, Yesterday’s Tomorrow.’ The game is a new resource from Feed the Pig to help millennials build savings skills, a product of the idea Scott Garner submitted for the Feed the Pig Game Design Challenge. The challenge invited people to submit ideas for digital games to help educate Feed the Pig’s target audience. More than 70 ideas were submitted, and his concept was chosen to help educate millennials through gamification.

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6 Money-Saving Tips You Can’t Afford to Miss

Money saving tipsThose fun, light-hearted GEICO commercials that ask if you are tired of paying too much for car insurance hone in on the idea of wasting your money –– paying too much for something or not getting enough.

As a CPA who is passionate about making my hard-earned money work for me, it’s important to take time to critically analyze what my cash is doing. Busy lives often lend themselves to costly complacency in one’s personal finances. Basically, we want bill paying done and our retirement planning intact with as minimal effort as possible.

At least once per year, I do a serious deep-cleaning scrub on my family’s finances. I look at what we’re paying and why, and I see where we need to do better. This “scrub” saves us thousands of dollars and I suggest each of you take a few hours each year to review your finances critically. Don’t let your money run itself; it needs you to keep it on track.

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5 Tips to Help Identify Fake Financial News

The AICPA National CPA Financial Literacy Commission Shares Insight on How to Beat the Real Threat of Fake Financial News

If it’s on the internet and in ALL CAPS it must be true! Whether it’s the GUY WHO TURNED $10,000 INTO $20 MILLION or the HOT TECH STOCK THAT WILL SHOCK YOU, you’ve probably seen some version of this fake news dozens of times a day. And, if you’re like me, you’ve probably clicked on one of these articles out of curiosity and quickly found yourself lost in a sea of misinformation. Sometimes it seems like you need to be a detective to decipher what financial news is real and what is fabricated. In this post, I’ll provide some information to help consumers be better prepared. Fake Financial News Infographic

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Back to Basics with "Money Minutes"

Money mattersImagine a world where high school graduates confidently understand the pros and cons of credit cards, recognize the significance of an emergency savings fund and even have a strong grasp on what student loans mean for their financial future. Does it sound utopian to you? Maybe, but at the AICPA we strive to provide students with resources to obtain this kind of knowledge each and every day.

A recent financial literacy test given by the National Financial Educator’s Council found that test-takers from 15-18 years old scored an average of only 63.17%. To experts, personal finance topics are seemingly common sense, however, there is a huge discrepancy between what is taught in school and what students are expected to know upon graduation and beyond. To help combat this issue, the AICPA launched Money Minutes, a video module series that gets back to basic concepts of financial management for high school students.

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Master Your Money: Golf Lessons for Financial Fitness

Sergio GarciaIf you watched the Masters this past weekend, you were most likely sitting on the edge of your seat. Sergio Garcia from Spain clinched the title from English player Justin Rose in a playoff that turned golf rookies into fans for life.

The most notable part of Garcia’s victory wasn’t the nail-biting 18th hole, but that he had nearly two decades of tournament experience – and this was his first major victory. Although considered one of the best players in golf, he never rose to the top like Tiger Woods, Nick Faldo, Jack Nicklaus and other golf “greats.” Until now.

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Make a List, Check it Twice: Sensible Holiday Shopping

Holiday shoppingWalk into any drug store, and you’ll be bombarded with holiday music insisting “‘Tis the season to be jolly…” and other calls for assorted cheer. And while the holidays offer plenty of opportunities for moments of merriment, fun and being jolly, they can also be a source of anxiety and financial stress for many Americans.

Consider me among those many Americans this year. I have eight nieces and nephews, a few young cousins, grandparents, godchildren, and my husband and two-year-old son on my list. Oh, and I’m having kid number two on December 27. Where to begin? I find it helpful to follow these 10 steps to stay on track while doing your holiday shopping.

  1. Make a list, check it twice. A big, scary don’t-leave-anyone-or-anything-out list. This includes the office Secret Santa gift, a few bottles of wine for the neighbors, gifts you donate to places of worship or charitable organizations, stocking stuffers, and the various friends and family members you’ll be sending gifts to. Then, take a deep breath.

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8 Ways to Save Money at Lunchtime

Shutterstock_517810591Lunch prices are getting out of control. For instance, working in midtown Manhattan, it is a challenge to find lunch for $10 or less. That amounts to spending approximately $50 a week or $2,600 a year. Consider how these funds could instead be used to help you reach your intermediate or long-term goals— such as buying a home or saving for retirement.

According to a recent study by research firm NDP Group, the average lunch costs $8.36 nationwide. Because of this, Americans are starting to change their lunchtime habits. In fact, the same study reported that traffic at eateries during lunchtime is down 7% since last year. Below are some tips to help you stick to a lunchtime budget regardless of whether you choose to make lunch, buy it already prepared or join the (shorter) line at the sandwich, salad, and soup place near your office.

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You Fancy, Huh? One in Four Americans Envious on Social Media

In these waning days of summer, my Instagram feed looks like a Lonely Planet top 10 list. I don’t know how, but it seems like the 300+ people I’m following have all conspired to be someplace awesome, while I’m toiling away in the office. It can feel frustrating when it seems like everyone (except for you) is having the time of their lives – and bragging about it online.

A new survey, conducted by Harris Poll on behalf of the AICPA, found that when it comes to feeling envious on social media, I’m far from alone. In fact, many Americans are caught in a cycle of feeling jealous of friends who post about their lavish vacations and extravagant purchases, while admitting that they also post things solely because they are fancy or expensive.

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Get to the Point: How to Make Travel Rewards Work for you


I don’t always get mail, but when I do it’s usually a credit card offer. And these cards are often tied to a particular hotel chain or airline. Many of these offers tout initial low-APRs, a waived annual fee and, increasingly, an obscene amount of rewards points – enough for a ROUND TRIP flight!!!! - if I only spend a few thousand dollars in the first couple of months.

However, my wife and I have been diligent about putting all of our charges on a credit card with a rewards program for a particular hotel chain and booking rooms at this brand whenever possible. The last thing I want is to lose our status with that chain by spreading ourselves too thin. This approach is working for us; over the past few years alone, we’ve paid for hotels in Denver, Boston, Puerto Rico, Baltimore and New Orleans using our rewards points. I’m by no means an expert travel hacker – that is, someone who has mastered collecting rewards points to earn free travel – but I’m making sure the money I spend on my card and the trips I take is working to my advantage. Seems simple, right? 

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Buying a Home? You May Have Missed an Important Step


Shutterstock_164412314Anyone who is going through the process of buying a home knows that it can be a long and expensive process. And it’s one that you need to get right to build a solid financial future. From finding the right realtor to determining the most important factors for your next home, there are many important steps to take. Luckily, 360 Degrees of Financial Literacy and Feed the Pig are here to help. Here are four essential tips (including one many people overlook) to help you with the home-buying process:

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360 Degrees of Financial Literacy Introduces Spanish-Language Resources

360FinancialLiteracyThe AICPA constantly searches for ways to enhance the 360 Degrees of Financial Literacy program and provide a wider audience with knowledge that will start them on the path to financial success. For this reason, the AICPA’s 360 Degrees of Financial Literacy program recently launched a new consumer Spanish-language resource center to address the need to educate the growing number of Spanish-language consumers in the United States.

The resource center offers help in several areas, such as fraud, paying for an education, how to raise a saver, tips for online shopping and credit card information. In the next few months, we plan to provide more content for the resource center that touches on popular personal finance issues and questions.

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Are You Helping Protect Your Older Clients From Financial Scams?

Elderly man being scammedMost everyone, at least once, has received an email from a “Wealthy Prince” who claims to know of a massive inheritance in their name. If only you would wire $10,000 U.S. to unlock $10 million … Sounds too good to be true, right? It is. In order to get the inheritance, this “Wealthy Prince” typically requires you send your bank account information, social security number, birthdate and other personal information. This leads to a financial disaster.

Unfortunately, this is just one of an increasing number of financial scams that people have fallen victim to, especially older Americans. Recently, an American World War II veteran was scammed out of $43,000 due to a fake sweepstakes that told him he won $4.7 million and a new Mercedes-Benz, as long as he provided personal information and opened a bank account where the money could be deposited. The elaborate scam involved multiple bank transactions over an extended period of time, each with the purpose of gaining the victim’s trust. Unfortunately, once the money is wired, it is very difficult to recover.

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Here’s How This Millennial Learned How to Budget

Millennial budgetingIf you have some semblance of common sense, then managing your money should be a piece of cake, right? Unfortunately, as I have seen in myself and in those around me, that is not always the case. Financial knowledge is a topic that many people think should be inherent, but in reality, this is oftentimes not true. 

As a millennial, frequent life changes become commonplace, and it can feel overwhelming. Whether transitioning to a new job, moving to a new city or deciding to get married – it’s easy to get distracted by the excitement and let personal finance fall by the wayside. According to a recent survey, over a third of millennials (34%) said that saving money was their top priority this year – more than leading a healthy lifestyle (20%) or losing weight (14%). Yet, millennials’ spending habits may be one reason they struggle to reach their financial goals: 65% of the young adults surveyed said impulse shopping got in the way of saving.

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When it Comes to Financial Literacy, Small Steps Add Up Quick

Stacking cake

When I was just starting out my career, I was in the same boat financially as a lot of recent college graduates. My primary focus was making ends meet. For me, this meant making decisions about how much I could afford for rent and managing my day-to-day expenses so that bills got paid on time.

In the back of my mind, I understood that my student loans and a few thousand dollars in high interest credit card debt also needed to be addressed, and that paying the monthly minimum was a bad look. In those days saving for retirement and building up a nest egg was a nice, if seemingly unattainable idea, like summering in the South of France or playing professional baseball. Surely there are people who do these things, but I had no idea how they made it happen.

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Prince’s $250 Million Mistake

PrinceWith songs like “Purple Rain” and “Little Red Corvette,” Prince wrote the soundtrack of a generation.

However, his failure to write a will could spell trouble for his $250 million fortune. Last week, people around the world mourned the death of this gifted singer and songwriter, and many were shocked to hear that Prince didn’t have a will or an estate plan in place. Even though he was a notoriously hands-on negotiator who meticulously controlled the intellectual property rights of his song collection, this unfortunate lack of planning has left uncertainty for Prince’s heirs. The future inheritance process could cost tens of millions of dollars in legal fees, and state and federal estate taxes. Surprisingly, he’s not the first famous person who left this world without a plan.

Not yet famous with a quarter billion dollar estate to leave loved ones? It’s still important to draft a will and keep it up-to-date based on changing personal and financial situations. Here are a few tips to make sure you have an effective will:

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Make Every Day Earth Day and Save Two Kinds of Green

Earth DayWhere I live in Queens, New York, recycling is mandatory. My husband and I keep a plastic sorting bin with two compartments—one for glass and plastic, the other for paper and cardboard—right next to our garbage can to make things easy…and messy, since our almost 20-month-old son thinks that the cardboard recycling is there for his entertainment. But a little mess in our living room is a small price to pay to help the planet. While recycling has become common practice in many parts of the United States, there are so many other things you can do that will help both the earth and your bottom line, and, in some cases, offer a tax break.

Water Conservation

  • Shut off the tap when brushing your teeth. Doing this twice a day saves up to 8 gallons of water.
  • Install low-flow shower heads in bathrooms.
  • If remodeling, consider low-flow toilets. These give the user the option of how much water will be used to flush based on the amount of waste.
  • Don’t buy disposable water bottles. Instead fill reusable water bottles.
  • Be sure sprinkler systems won’t go off when it has rained or during the sunniest times of the day and be mindful of drought conditions.
  • When running water to wash dishes, collect the initial cool water to water houseplants.

Potential cost savings: A family of four that upgrades and optimizes their water usage can save nearly $300 a year in utility bills and 32,000 gallons of water.  For more tips on water conservation and to calculate how much you might save, visit the Environmental Protection Agency website.

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The Growing Importance of Financial Literacy Month

Fin lit 2Every second, America’s trillion dollar student loan debt grows by nearly $3,000. This debt that people begin to carry at an early age often leads to more uninformed financial decisions, such as taking on credit card debt and other loans they can’t afford. Typically, this occurs because of limited access to financial education tools and resources. This alone points to the urgent need for financial literacy in this country.

The AICPA and state CPA societies across the country are leading the effort to address this growing problem through new programs and initiatives. April is Financial Literacy Month, and we continue to be diligent in spreading the important message of financial literacy to millions of Americans. Through the AICPA’s flagship 360 Degrees of Financial Literacy program, the national volunteer effort of CPAs to help all Americans understand their personal finances through every life stage, we have combined grassroots advocacy with free public resources and tools for CPAs to educate Americans of all ages. Additionally, Feed the Pig, the AICPA’s award-winning public service campaign with the Ad Council, has provided tools and resources aimed specifically at Americans aged 25-34, an age group that is making major life decisions, often with little financial experience or guidance.

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What’s a Hooraycation, and How Can I Go on One?

GalapagosGetting Away from it All After Busy Season: Trips for Any Budget

As busy season finally draws to a close, your senses dulled by long nights staring at a monitor and routing through piles of disorganized receipts, you might understandably be thinking about taking a well-earned break. Recharging your batteries, getting acquainted once again with those people who share your house and enjoying a few days of relaxation mean different things to different people, but in the end it always comes down to budget. Here are three family-friendly vacation types you can plan today, designed for modest, moderate and extreme budgets.

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Gaming for Change: How Technology is Changing Financial Literacy

Gaming for ChangeWith the financial landscape shifting seemingly every year, it comes as no surprise that consumer finance tools are also transforming and becoming more necessary. This is especially true when it comes to educating younger generations, and the AICPA’s Feed the Pig campaign knows this all too well.

Since the campaign’s launch in 2006, the promotion of our tools evolved from focusing on TV, radio spots and other traditional media to instead looking to the digital space. As much as this shift has followed advancements in technology, it has also tracked the developing needs of our audience. Young adults look to social media for socialization, news, advice, just about everything. Feed the Pig has taken our message and resources to where our target audience is already: Facebook, Twitter, Pinterest, Tumblr, and now Snapchat. Through these platforms, we can reach hundreds of thousands of people who are in need of personal finance tips.

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Young Love Birds: Take Heed of Old Marrieds on Valentine’s Day

How to Celebrate Love While Staying on Budget

Valentine's day

This year, Americans will spend an estimated $17 billion on Valentine’s Day gifts for significant others, family members, and pets. (Don’t laugh—Americans spent more than $700 million on their pets last Valentine’s Day.) According to the National Retail Federation, the average person spends $142.31 on the day of love. Less likely to spend that much? Those married or coupled for more than five years. Whether they’ve lost that loving feeling or they’ve wised up about inflated prices on Valentine’s Day, young people can learn a thing or two from long marrieds and save a few bucks.

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7 Financial New Year’s Resolutions


Pack lunchAt the start of each New Year, many people make resolutions and vow to stick to them. Some say that they will exercise more frequently or focus on dieting, but what about improving one’s finances? Team AICPA brainstormed some financial New Year’s resolutions to help you meet your 2016 financial goals:

1. Set an achievable budget for the year. Start by reviewing your expenses from last year. Were some of your targeted figures unrealistic? Are there areas where you can cut back? If you’ve never had a budget, now’s the time to make one.

2. Take a deep breath if your December credit card bill is higher than your monthly average. With all of the holiday shopping for family and friends, extravagant parties and meals at restaurants, a larger balance is typical. Remember to reflect on the enjoyment gained from these activities and take the time to plan your upcoming monthly budgets so that you are back on track for the rest of the year. If you really got yourself into an unfortunate financial situation, take time to assess how it happened and address the underlying issues that led you to overspend. Use the 360 Degrees of Financial Literacy credit card pay off calculator to figure out how best to get back on track.

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Dreaming of the Jackpot: 8 Tips to Help You Manage Your Money If You Win Big


JackpotYour own private island. A villa in Tuscany. A sprawling mansion in Malibu. A ticket around the world. Oh, the things you could do with $1.3 billion in lottery winnings. But before you get carried away, consider those past lottery winners who mismanaged vast fortunes, losing everything. Don’t fall victim to the same fate. 

Live life as usual, until you develop a plan for how you will handle your winnings. You’re excited. Who wouldn’t be? But it would not be financially wise to buy a house, boat or luxury car the day after winning big. You will want to consult both a CPA and a tax attorney who have experience dealing with unexpected windfalls. These professionals can help you determine if you should take the lump-sum or annuity payment option, and help you develop a plan for how to use your new-found fortune.

How much money will you actually walk away with? Just because the jackpot is now advertised as about $1.3 billion does not mean that is the amount that will wind up in your bank account. Winnings of more than $5,000 are subject to a 25% federal withholding tax. The actual federal tax rate is likely to be higher — possibly as much as 39.6%, depending upon other factors such as income, deductions and residence. Additionally, depending upon where you live, your winnings may be subject to state and local income taxes. Of course, if the jackpot sum is enormous, this likely will not make a huge difference. However, it is important to keep in mind.

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New Version of Bank On It Teaches Financial Literacy Skills

Bank On ItCPAs have an innate calling to educate the public about their finances. The need for this education has never been greater. A recent online survey conducted by Harris Poll on behalf of the AICPA showed that a staggering 75% of college students acknowledged that their student loan debt would require some sacrifices in their lives after graduation. So how can we help students develop a better understanding of their financial situations prior to attending college, while also setting them on a path to financial success?

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Holiday Shopping: A Cautionary Tale

Holiday present

 Holiday Shopping: A Cautionary Tale

As a teenager, every year I knew where I would be the Saturday before Christmas: getting dragged from store to store by my father, who inevitably waited until then to go shopping for my mother’s gifts. This annual exercise in procrastination and family bonding was a recipe for arguing and, more importantly, left my dad no opportunity to shop around for the best deals.

Here’s how you can avoid these holiday shopping pitfalls and get good deals, stay on budget, and remember to factor in more than just gifts when you calculate your holiday spending goals.

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Back to School: Budgeting 101

College student moneyFor CPAs, budgeting is as easy as debits on the left, credits on the right. It is simply the way it is. But not everyone is a talented budgeter. A recent AICPA survey revealed that college students aren’t as monetarily savvy as they think they are.

Just how much do college students need to brush up on their budgeting skills? While 57 percent of students surveyed rated themselves as having excellent or good personal financial management skills, nearly half reported having less than $100 in their bank account at some point in the last year, 38 percent said they had borrowed money from friends or family in the last year, and 11 percent had missed a bill payment. It is clear that college students’ perceptions of their financial skills and reality are not aligned.

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Back-to-School: How to Pay for College

529 plansSleepless nights are an unfortunate reality when you become a parent. And nothing can get parents tossing and turning like thinking about how they will pay for their son or daughter’s college. For the very financially minded, this worry may arise as soon as you find out you’re expecting. Others may not start to worry until much later. No matter your child’s age, the staggering cost of college is likely to become a concern at some point. Consider this: a four-year education at a private college is on track to cost $323,900 by 2033. Might as well give up now, right? Wrong. You can build your child’s college fund slowly and steadily as you go from changing diapers to handing over the keys to the family car. The solution? A tax-deferred savings plan.

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Back to School: The Hidden Costs of Applying to College

Money and graduation capThe cost of college—continuously rising, constantly scrutinized and always in the news—is nothing new. For students enrolling in 2015, the average projected total cost of education (tuition and fees) at a private four-year college is $134,600 and a public four-year college is $39,400. The most expensive four-year colleges (think Ivies and other top-tier universities) are already $272,000, or $68,000 a year. These numbers are enough to make even the most financially prepared parents gasp. But, before you get to actually paying for college, a host of expenses must be taken into account.

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5 Financial Tips for Newly-Employed Young People

PitbullSummer. A time for barbeques, trips to the beach, ice cream and, for many teenagers and young adults, their first jobs. What better time, then, to educate the newly employed about sound financial practices, before they’re tempted to spend all of their hard earned income having a good time?

For many Americans, the pursuit of fun is more of a priority than saving money. Just turn on the radio and you’ll hear any number of songs about frivolous consumerism. In the case of one of this summer’s ubiquitous songs, Time of My Life, the rapper Pitbull (né Armando Christian Pérez) celebrates the disastrous practice of spending money he doesn’t have:

“I knew my rent was gon' be late about a week ago
I worked my [butt] off, but I still can't pay it though
But I just got just enough
To get up in this club
Have me a good time, before my time is up
Hey, let's get it now”

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Got GIF? Financial Literacy in 140 Characters or Less

Feed the pigLast month marked my fourth Financial Literacy Month at the AICPA. It’s amazing how much the landscape and messaging has changed in just a few years. While our outreach and exposure for the program has grown, our actual messages to individuals have become shorter. We have moved from lengthy articles on our websites, to a few sentences on Facebook and now to singular images on Tumblr. In a world where younger audiences are looking increasingly to online sources for financial advice, how do we accurately communicate financial literacy lessons with just one animated photo and a few words?

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In the News: CPAs Provide Gift Tax Guidance and Cyber-Security Tips

Shutterstock_124401508CPAs serve as trusted advisers and provide their clients with expert guidance on a variety of topics. It’s no surprise that they are frequently cited by the media for their expertise in areas such as tax, financial planning and even cyber security best practices. I’ve summarized a few recent examples of CPAs helping people make informed decisions about their financial lives.

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CPAs Play an Essential Role in Improving the Financial Education of All Americans

As Financial Literacy Month draws to a close, it’s important to reflect on the essential role CPAs play in helping improve the financial knowledge of Americans.  Educating consumers about their finances is the volunteer cause of the CPA profession.  Through the AICPA’s 360 Degrees of Financial Literacy program (360), thousands of CPAs from all over the country volunteer their time to speak with consumers of all ages about their finances. Increasing our citizens’ financial education is critical to our country’s financial success, and the AICPA is leading the way for the CPA profession.

During my tenure as chair of the National CPA Financial Literacy Commission, CPAs across the country achieved much and celebrated many milestones in financial literacy.  I have been involved with developing and releasing several rounds of creative from Feed the Pig, the AICPA’s PSA campaign with the Ad Council, and, along with the rest of the Commission, participated in releasing the AICPA’s first consumer publication, Save Wisely, Spend Happily, authored by Commission member Sharon Lechter, CPA.  Commission members promote 360 and its related programs, and represent 360 before the media and national organizations. Our members are essential in promoting 360 with AICPA leadership, committees, state society leadership and key accounting organizations. I am proud of the work Commission members do and the leadership they provide.

 

 

CPAs in public service have also played an important role in the profession’s financial literacy efforts. On April 22, U.S. Representative and Congressional Caucus on CPAs and Accountants member Michael Conaway, CPA (TX-11) gave a speech on the House floor highlighting April as Financial Literacy Month. Representative Conaway noted the important role that CPAs across the country play in improving the financial literacy of Americans, and how, for over 10 years, the AICPA, members and state CPA societies have worked together through 360.

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The Importance of Financial Literacy Month

Fin Lit Month 2015 2In a few short months, millions of new college graduates will enter the job market with an average of $30,000 in student loans. Student loan default rates are rising as recent graduates struggle to pay down their debt. The reason? New graduates will have degrees that have prepared them for careers or graduate school, but most will not have the knowledge to make sound financial decisions. That is why financial literacy is so important.

April is Financial Literacy Month and this year the AICPA marks the occasion with a renewed sense of purpose. With CPAs as our champions, the AICPA has advanced the financial literacy cause for over a decade, and we will continue to provide leadership in improving the financial understanding of future generations. It is critical not only for their individual success, but for the financial success of our country. For more than 10 years, the AICPA, its members and state CPA societies have been leaders in financial literacy by providing free programs, tools and resources for consumers, educators and more.  The AICPA’s flagship 360 Degrees of Financial Literacy program is the national volunteer effort of CPAs to help all Americans understand their personal finances through every life stage. The program combines grassroots advocacy with free public resources and tools for CPAs to educate Americans of all ages. In addition, Feed the Pig, the AICPA’s award-winning public service campaign with the Ad Council, provides tools and resources aimed specifically at Americans aged 25-34, an age group that is making major life decisions, often with little financial experience or guidance.

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Broadening Our Definition of Financial Literacy

Micpa-logo-Here at the Michigan Association of CPAs, we’ve embarked on some projects that go beyond the traditional approach to financial literacy. We’ve had the fantastic opportunity to work with Michigan’s Governor Rick Snyder, CPA on several initiatives aimed at our most vulnerable populations, including Reinventing Mi Retirement and the Detroit Income Stabilization Fund Program.  

The Reinventing Mi Retirement initiative was introduced by Governor Snyder in June 2014, and it focuses on providing financial education to help Michiganders better prepare for retirement. The initiative officially kicked off in October 2014 with eight locations in Michigan offering free informational sessions for community members. CPA members participated at locations across the state to provide free financial checkups, helping attendees gain a better understanding of budgeting and financial preparedness. Attendees also received an incredibly thorough financial toolkit, which our members contributed to as well. The event came together in just a few months due to the strong partnership we have with the State of Michigan and the incredible commitment of our member volunteers. We look forward to new initiatives planned in 2015, including events targeting younger people who maybe aren’t thinking about retirement yet, but need to be!

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Happy Financial Literacy Month

Fin Lit Month 2015Today, April 1, kicks off Financial Literacy Month. In addition to our year-round efforts, the AICPA, and CPAs across the country, participate in this annual event centered on improving Americans understanding of financial principles and practices. As part of this year’s festivities, 360 Degrees of Financial Literacy has launched a newly redesigned website with an updated set of tools and resources to better help Americans understand their personal finances and develop money management skills at every stage of life. 

Here are some of the other great, free events and resources to help your friends, family and clients improve their financial knowledge. 

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Reasoning with Reasonability

There is an abundance of terms and phrases that American’s use to make the act of savings feel less painful, like evaluating, bargaining, or prioritizing. But no matter how you phrase it, saving can be difficult for even the most responsible person, especially with matters that have a strong emotional component. For instance, when it comes to once in a lifetime events, like a wedding, people are much quicker to concede on their financial plan. In fact, according to The Knot's annual Real Weddings Study, the average cost of a wedding (excluding the honeymoon) reached an all-time high of $31,213 in 2014, up 4.5 percent from 2013. This is the fourth consecutive year of gains. 

Pig - MarriedWhile many argue that increased spending may reflect the improving economy, The Knot’s study showed that the increase in spending goes beyond inflation and was represented across all income levels and regions. Additionally, 45 percent of couples said they strayed from their wedding budget, and 23 percent said they didn't even have a budget to begin with. From a financial planning standpoint, it may seem unreasonable to spend outside your budget, but is it any more reasonable to ask someone to concede on such an important, emotional event? Where do you draw the line?

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Are You Cheating on Your Spouse Financially?

Couple financesDo you have a secret bank account or credit card that your spouse doesn't know about? Do you lie to your partner about how much you really spend? The topic of financial infidelity, whereby spouses lie to one another about money, emerged as one of the surprising topics of discussion at a recent meeting of the AICPA National CPA Financial Literacy Commission in Washington, DC. 

Commission members discussed a recent creditcards.com financial infidelity report that showed that about 20 percent of people admit to spending $500 or more without telling their significant other. According to the study, men are more likely to both spend more than $500 and have a secret account.

One way to prevent this is by setting aside some time with your partner (away from busy or stressful times) and having an open discussion about your spending and financial goals. Another solution offered was to have a joint account, but open separate accounts to make individual purchases. The key is having a trusting partner with whom you can have an honest and open dialogue about your finances.

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Disaster Planning and Recovery Advice from CPAs

Blizzard prepWith a historic blizzard bearing down on the Northeast, many people have considered their physical well-being. They’ve stocked up on milk, bread and blankets to weather the worst.

But what about their fiscal well-being?

Events like this one also require financial preparedness – having cash on hand in case the power goes out and insurance information handy in case snow-laden trees come crashing down.

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Give Thanks, and Give Back

Hands raisedNo matter how many times you may have reminded yourself, it’s a fair guess that you most likely did not completely eliminate the urge to splurge during the recent holiday season. Even though your family may have said no gifts are necessary, it can be hard to swallow the idea of showing up empty handed—my immediate family says year after year that “our presence is our present,” and yet we all show up with armloads of gifts, every year. The last thing we want is to cause our loved ones financial distress at our expense, so how do we fight the urge to splurge in the year ahead?

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The Global Future of Financial Literacy

September is underway and that means it’s back to school for students. As teachers finalize their lesson plans, a growing number may be incorporating financial literacy education. In fact, many schools around the country have already begun integrating financial literacy into their curriculums. And it makes perfect sense.

Helping young people understand financial issues is a matter of great importance. Younger
generations are facing an increasingly complex financial field, compared to their parents, and they are more likely to shoulder more financial risks in adulthood, especially when it comes to saving, planning for retirement and covering healthcare needs. On July 9, the Global Financial Literacy Excellence Center in collaboration with the U.S. Department of Education, the U.S. Department of the Treasury, and the Consumer Financial Protection Bureau hosted the U.S. release of the 2012 Programme for International Student Assessment financial literacy data. The assessment tested 15 year-olds on their knowledge of personal finances and ability to apply it to their financial problems. This is the first large-scale international study to assess the financial literacy of young people.

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In the News: CPAs Provide Financial Tips for a Stress-Free Summer

Dollar-chaiseSummer was always thought of as the time for sunny days at the beach, BBQs and bonfires. But these days most American adults equate summer with financial anxiety, according to a recent telephone survey conducted for the AICPA by Harris Poll.

According to the survey, about 6 in 10 U.S. adults (59 percent) said their financial tension during the summer matches or exceeds the stress they feel during the year-end holiday season. The AICPA’s National CPA Financial Literacy Commission has been reaching consumers with tips to help them alleviate the stress of summer by making smart financial decisions.

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Money Matters for Mothers and Daughters Alike

Triumphant-womanThis Sunday is Mother’s Day. While many mothers may be treated to flowers and breakfast in bed, it’s also a day to celebrate the strength that comes with being a mother. But sometimes, that strength can waiver when it comes to finances. 

"Be Prepared, Not Scared" is what I have been telling my clients for years. This is especially important for female clients. According to a 2012-13 Prudential Research Study on the financial experience and behaviors among women, only 22 percent of women feel “very well equipped” to make wise financial decisions. A likely reason for this is that, in male-female relationships, most often the “chore” of planning is handled by the husband. My goal is to change that. While most of my married clients are men, we push to get wives involved at the earliest point in their personal financial planning engagement.

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Crowdfunding Isn’t Like Shopping Retail

In our last blog post on crowdfunding, Charles Landes, CPA took a deep look at equity crowdfunding, specifically how the Securities and Exchange Commission rules are shaping up as required by the Jumpstart Our Business Startups Act of 2012. However, equity crowdfunding is not typically one’s first introduction to this new funding approach. Many are first introduced to crowdfunding through one of the various crowdfunding platforms that exist, such as Kickstarter. If you are not familiar with crowdfunding through a platform like Kickstarter, the concept is relatively simple. A person or company comes up with an idea, determines the cost to create this idea and sets a funding due date. Projects also feature rewards based on the contribution, for instance, backers may receive a T-shirt or the actual product they are supporting. If the project fails to meet its finance goal by the set date, then the project is not funded.

Backers have funded all types of projects, from virtual reality systems, like Oculus Rift (which was recently acquired by Facebook), to dream cars, like a DeLorean Hovercraft. Other projects have gone on to win an Oscar and be featured at the Cannes Film Festival. However, not every project makes it. What happens when a funded project fails to deliver on its promise?

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Volunteer This Financial Capability Month

Volunteer-april
April is National Financial Capability Month, an annual event designed to help Americans improve their understanding of finances. As a CPA, you can significantly increase its value and impact, and help ensure the month is more than just a reminder to consumers to save and spend wisely. When you get involved, you can:

  • Help Americans build their financial understanding and capabilities
  • Strengthen and advance the CPA profession
  • Give young CPAs an opportunity to develop leadership skills
  • Volunteer and build your network at the same time

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March Money Madness

Pig - BasketballWhile many CPAs are in the depths of tax season right now, sports fans are entering the height of the college basketball season: March Madness. Even the most lackadaisical college basketball fan can’t help but get into the spirit. It also can be a prime time for overspending, whether buying rounds of drinks while watching the game at the bar or participating in the office pool. Although the NCAA tournament may be a one-and-done system, CPAs know all too well that this is not the case with personal finances.

The commonsense financial approach to events like March Madness are usually your typical stick to a budget, think before you spend, etc. But often no matter how many “tips to save money” you put out there, consumers are still drawn in by the pressures of friends, family and the media. While the individual consumer may know all the tips and tricks and understand the impact their decisions will make, that doesn’t mean it’s easy, and it doesn’t mean they’ll do it. So how do we, as professionals in the finance community, combat this? How do we change the thinking of Americans to one be focused on financial wellbeing?

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Emotions at Play: To Spend or Save?

Whether we like it or not, emotion plays a part in almost everything we do; from making a move at the end of a date to hitting the snooze in the morning before work. Emotion is that little bug in your ear that can sway your decision making, no matter how logical you may try to be. That’s why strong emotions, such as love, can make you feel so crazy. 

Pig - Love 2I’ve worked on the Feed the Pig campaign for several years, and as a member of its target audience I know firsthand that emotional spending is a common struggle for my peers. This is especially true when it comes to holidays, like today, Valentine’s Day, when Americans feel compelled to spend that extra dollar to show someone that we care, no matter how unnecessary and unrealistic it may be.

A few weeks ago, we sat down with National Financial Literacy Commission members Kelley Long, CPA/PFS, and Clare Levison, CPA, for a Facebook chat with consumers about finances and the role that emotions often play in our decisions. Here are a few of the top Q&As from the event:

 

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Celebrating a Life of Service

MLK-Day-of-Service“Life's most persistent and urgent question is, 'What are you doing for others?'” – Martin Luther King, Jr.

Today we celebrate Martin Luther King, Jr. Day, a day commemorating the extraordinary work and sacrifice of an incredible man; a day when people across the country strive to answer King’s question by coming together to serve their neighbors and communities. King is best known for his dedication to the advancement of civil rights, and, in his later years, poverty eradication and economic justice.

The MLK Day of Service is part of United We Serve, the President's national call to service initiative, asking Americans from all walks of life to work together to provide solutions to our most pressing national problems.

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In the News: CPAs Providing Financial Guidance for 2014

New-year-resolution

In a recent post I detailed a number of articles highlighting tax tips provided by AICPA staff and members that individuals can use to save themselves money when they file their 2013 returns.

As the calendar flips to 2014 (the year of the polar vortex), AICPA members and staff have been providing guidance on how to ‘recover’ from holiday spending, save more in 2014, and outlining tax changes that may impact consumers.

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Being THAT Guy

“When she said ‘I just paid off my student loans,’ I thought, WOW how did she do that. It makes you think what’s important and what’s not.”

“I like the positive role model thing.  I want to be this guy.”

These quotes are just a small sampling of feedback from the Feed the Pig’s target audience (25-34 year olds) after viewing the campaign’s newest PSAs during focus groups held earlier this year. Each TV spot highlights both the positive financial behavior—buying a home, saving in a 401(k) and paying off student loans—of one young adult or couple paralleled with the spending habits of their peers, who simply cannot believe there’s any money left over at the end of the month to save. (View all the new PSAs on the new Feed the Pig website.)

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In the News: AICPA to Congress: Consolidate Small Business Retirement Plans

The AICPA is gearing up for our Fall Meeting of Council, which begins Oct. 20 in Los Angeles. Be sure to follow @AICPA_JofA and @AICPANews on Twitter and subscribe to the AICPA’s Press Center RSS feed to keep up with all the news and information coming out of the meeting.

In the meantime, I’ve highlighted a few recent accounting articles in the news that you may missed over the last week.

US-capitolAccounting Today covered the recent written testimony that the AICPA submitted for the record of the House Small Business Committee’s hearing on retirement savings for small employers. In the testimony Jeffrey A. Porter, AICPA Tax Executive Committee chairman, suggested several ways to simplify the complexity of the retirement planning universe.

“When a small business grows and begins to explore options for establishing a retirement plan, the alternatives, and the various rules, can become overwhelming,” he wrote in his testimony.

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