Tax Season: An Opportunity for Financial Literacy Lessons

The end of tax season is fast approaching, and CPAs everywhere are no doubt looking forward to the end of their busiest time of the year. Although I bashfully admit that my returns still have yet to be filed, I see this time of year as a prime opportunity for me to take a good look at my finances. Sure I keep the typical year-round budget, and do my best keep my finances in check, but there are always places for improvement. Since joining team AICPA, I have realized, more than ever, that year-round tax planning can truly help prepare you for life changes, while staying on track to achieve financial goals.

In the News: Accounting Graduates Earn 20% More than Average

The National Association of Colleges and Employers recently released the findings of their latest Job Outlook survey, which contained good news for current accounting students as well as recent accounting graduates. According to the survey, accounting majors who graduated in 2011 earned an average starting salary of $50,500, up 3.7 percent from the previous year and roughly 20 percent more than the average starting salary of all graduates. This increase isn’t an anomaly, according to Andrea Koncz of NACE, who told FINS.com that "entry-level accounting and finance jobs tend to see steady growth from year to year."

12 Things You Need to Know About Benjamin Bankes

In light of the new Feed the Pig PSAs, we asked the star of the PSAs, Benjamin Bankes, our twelve light-hearted questions. These are just for fun and to gain some insight to what makes him tick.

Feed the Pig: Great Time to Save Money [INFOGRAPHIC]

The AICPA, in partnership with the Ad Council, launched the next phase of its award-winning Feed the Pig campaign with the release of new public service advertisements.  The new PSAs promote the key message: “Put away a few bucks. Feel like a million bucks.” In connection with the new PSAs, they also created this excellent infographic highlighting tips on saving money. DailyInfographic.com even picked it up. Click on the image to enlarge.

Related articles

• In the News: Easy Steps to Save $1,000 (aicpa.org)
• Creating a Brighter Future for the Nation's Children (aicpa.org)

In the News: Easy Steps to Save $1,000

Do you happen to be one of the many people who has resolved to make saving money a priority this year? Do you also find yourself in the category of those who feel they cannot even save $25 a week?  If so, Mackey McNeill, CPA/PFS, a former member of the AICPA’s National Financial Literacy Commission, has offered some actionable tips to help you painlessly save $1,000 this year in an article appearing on depositaccounts.com.

McNeill suggests finding your largest discretionary expense and challenging yourself to spend 5% less. For example, if you spend $400 a month at the grocery store, make it your goal to reduce that figure to $380. The 5% challenge works because it doesn’t feel like a huge sacrifice, but $20 over the course of a month translates to a cool $240 a year (full disclosure: I was a math minor).

10 Minutes to Understanding Our Nation’s Fiscal Health

If you’ve watched the news, picked up a paper (or read one on your electronic device) or listened to the radio in the past year, you’ve probably heard about America’s debt, its bond rating and political gridlock.

Instead of telling you what fiscal challenges our country is facing, I think it’s better if you understand them for yourself. Today, I’m encouraging each of you to spend a few minutes taking a short quiz that will test how well you understand the financial matters being discussed in Washington, D.C.

In the News: Saving Money is Top New Year’s Resolution

Hello and Happy New Year to my Insightful readers! I hope the holiday season was full of joy and left you rested, relaxed and most importantly, ready to tackle the year ahead.

The AICPA will be launching a number of exciting initiatives this year and I’m looking forward to getting the news out and continuing to share interesting articles about the profession that you may not have caught. As always, if you happen to see something that makes you stop and say ‘this is important news CPAs should really be aware of it’ – please send it my way and I’ll consider it for inclusion.

Every January many Americans resolve to make beneficial changes to their life. They may decide to start exercising, to spend more quality time with family and friends or to, finally once and for all, get organized. A recent survey conducted by the AICPA and Ad Council has found that, for young adults, saving money in 2012 is at the top of their priority list. The survey was released to coincide with the launch of a new PSA on behalf of the national Feed the Pig financial literacy campaign, which helps 25- to 34-year-olds take control of their finances and make saving a priority. 

Finding Financial Peace During the Holidays

This time of year always goes by the fastest--it feels like just yesterday I was carving pumpkins and now I’m counting down the remaining shopping days until Christmas. This time of year also can be the most difficult for sticking to a budget established months ago. Even with the economy still struggling, total spending over the four-day Thanksgiving weekend reached a record $52.4 billion, up 16% from $45 billion last year, according to a survey by the National Retail Federation released the Sunday after Thanksgiving. Holiday indulgence is impossible to avoid, but peace and understanding may be the best gift you can give to others and yourself.

Teaching children financial lessons is important throughout the year, and the holidays present a perfect opportunity for learning. A friend of mine told me about how her parents used to give each child a set amount of money—about ten dollars—to spend on gifts for everyone. She said that it taught them to carefully think through how much they wanted to spend on each person for whom they wanted to buy a gift; it also made them think through their gift recipient list. This simple exercise incorporated the basic concepts of prioritizing and budgeting.

In the News: Financial Literacy, Social Media

I hope everyone had a happy Thanksgiving holiday and has safely emerged from their tryptophan induced coma. It’s been a busy few weeks for AICPA and the profession, with lots of interesting news coming out. I’m particularly thankful (see what I did there?) to be able to spotlight a couple of my colleagues on the Communications Team who were mentioned in the media recently.

Melora Heavey, AICPA senior manager – communications (and AICPA Insights blogger) spoke to Fox Business about some of the ways that companies are taking steps to develop a more financially literate workforce – which serves to benefit both the employees and the organization itself. “Companies are trying to manage insurance costs, and having a workforce that has a thorough knowledge of their benefits and options help them to do this,” says Heavey. How prevalent are these programs? A study by the Society of Human Resource Management found that 30% of organizations surveyed  offered one-on-one financial/investment advice, 24% offered in-group or classroom advice and 22% offered online advice. Companies interested in implementing financial education programs for their own employees can find free resources at wlife.org, the website for the Workplace Leaders in Financial Education Awards, a program co-sponsored by the AICPA and SHRM.

Creating a Brighter Future for the Nation’s Children

The Jump$tart National Educator’s Conference brought together K-12 personal finance public and private school teachers from 46 states in Washington, DC, this weekend.  The annual event highlights tools, resources, information and support for teaching personal finance in the classroom and includes networking and peer-to-peer sessions, as well as workshops and roundtables on advocacy, curricula and personal development.  As the AICPA’s representative on the Jump$tart Board of Directors, I was fortunate to attend this conference, share the AICPA’s financial literacy resources and learn more about the successes and challenges these educators face.

The Savings Balancing Act

They say necessity is the mother of all invention. And if that’s true, there may be some bright spots in this dour economy of ours.

The U.S. Bureau of Labor Statistics offered insight last week into the amount of money households are spending. Last year, average expenditures dropped 2 percent, on the heels of a 2.8 percent decline in 2009. No surprise there. Consumers are in no mood to spend.

Dig into the numbers a bit deeper and you’ll see some interesting changes in how they’re spending. Expenditures on vehicle maintenance, for instance, rose 7 percent, while spending on vehicle finance charges dropped 14 percent. At the same time, public transportation expenses increased 3 percent. This could suggest, at least in part, that consumers are holding onto their current vehicles longer and exploring other, cheaper options for travel to offset higher fuel costs.

Both are smart moves from a personal financial perspective—especially if those behaviors stick.

But make no mistake, the continued overall decline in spending also highlights a real challenge. Consumers account for about two-thirds of economic activity. When they rein in spending, the ripple effects can be extensive, as evidenced by the current unemployment rate and other challenges we’re facing.  

Consumers need to save to protect their financial futures.  How do they balance that goal with our economy’s need for stimulation that spending brings? A recent Federal Reserve report (page 7) offered this statistic: Each one percentage-point increase in the savings rate is associated with a decrease in spending nationally of $100 billion. So what message should we be sending to consumers? In an economy with rising prices and declining spending, how do we help stimulate the economy while still encouraging saving? What advice do you give your clients and family?

Cheryl Gravis Reynolds, Director of Communications, Advertising and Brand Management, American Institute of CPAs. Cheryl oversees executive, member, international and state society communications as well as advertising and brand management and social media strategy. She also leads the CPA profession's award-winning financial literacy campaigns, 360 Degrees of Financial Literacy, and Feed the Pig, a public service advertising campaign with the Ad Council.  

CPAs to the Rescue

 As Hurricane Irene spun her way up the East Coast, the spotlight brightened on disaster planning.

And on CPAs.

CPAs have long been leaders on emergency preparation. Members of the AICPA’s Personal Financial Planning section a few years ago partnered with the American Red Cross and the National Endowment for Financial Education to produce guides to help consumers prepare for and recover from disasters. You can see the expertise included in these guides and the insight of our members on display throughout the media when natural disasters occur.

In the aftermath of Hurricane Irene, for instance, CPA financial planners Michael Eisenberg and Mitchell Freedman were quoted in this Wall Street Journal story: Insurance, Records Are Key In Storm's Wake.  Eric Rigby, a CPA financial planner in New Orleans, was interviewed live on the Weather Channel about disaster preparation.

The PCPS Section today is hosting a webinar, “Disaster Losses: From Start to Finish,” to empower AICPA members with information to help clients during a disaster. Louisiana practitioner Jerry Schreiber, who has presented numerous seminars on disaster loss, will cover topics including:

• The emotional toll on clients
• Accumulating the information to document a loss
• Reporting the loss on the tax return.

The free webinar will take place from 2:00 p.m. to 3:30 p.m. EDT today. Be sure to register and reserve your space.

Be sure to check out other disaster planning and recovery resources available from the AICPA, including the guides and checklists from 360 Degrees of Financial Literacy. It is powerful information that you can use with clients or in your communities to demonstrate the value that CPAs deliver every day.

Andrea Millar, CPA/PFS, Sr Technical Manager - PFP, American Institute of CPAs. Andrea leads the AICPA Personal Financial Division. Her responsibilities include working with the PFP Executive and PFS Credential committees to drive the advocacy, education and other initiatives on behalf of the 7,500 AICPA members who specialize in providing estate, retirement, tax, investment and insurance advice to their individual clients.

Tips for a Financially Fit Fall

Many would agree that a significant amount of what we learn is learned at home. In fact, almost 50  percent of those who closely monitor their finances say that they learned about personal finance from their parents or at home. Yet, only 34 percent of parents have taught their teen how to balance a checkbook, and 93 percent of parents with teenagers report worrying that their children might make financial mistakes, such as overspending or living beyond their means. While awareness of the need for greater financial education has grown in recent years, there is still work to be done.

Here are some tips to share with your family and clients to strengthen their financial understanding.

In the News: Women to Watch, Financial Literacy, CPE

A recent AccountingWEB article spotlights the Women to Watch Program, an effort of the AICPA’s Women’s Initiatives Executive Committee, which will be honoring women who have made significant contributions to the accounting profession and to the development of women. Candidates are nominated by their peers and firm. Award winners will be honored at events sponsored by their CPA societies. "The women who are selected for the Women to Watch awards have made some outstanding or unique contribution to the profession. They have been successful in integrating their personal and professional lives. They are more visible because of the awards. They become role models. They prove it can be done," added Yasmine El-Ramly of the AICPA.

What's Your Financially Fit Story?

In honor of its 125th anniversary in 2012, the AICPA will publish a book, tentatively titled Raising Financially Fit Families, to help families better understand their finances with lessons from the experts: CPAs. Be a part of this unique publication by submitting an essay highlighting a personal or professional experience you had in on helping others, whether a family member or client, build a brighter financial future.

CPAs’ stories and lessons about savings, planning for big-picture purchases, paying for college and teaching children healthy and life-long money habits will be the centerpiece of the AICPA’s first foray into the consumer book market. Raising Financially Fit Families will be edited by New York Times best-selling author and National CPA Financial Literacy Commission member Sharon Lechter, CPA, whose books include Three Feet from Gold and Rich Dad Poor Dad as well as the newly released Outwitting the Devil. Each selected submission will include the author’s name, company or firm and state CPA society. Visit aicpa.org/financialliteracy for more information, sample essays and details on how to submit an essay for Raising Financially Fit Families.

Melora C. Heavey, AICPA Staff.Melora manages the CPA profession’s volunteer effort, 360 Degrees of Financial Literacy, and the award-winning public service campaign, Feed the Pig.  She serves as the staff liaison to the National CPA Financial Literacy Commission, the leadership body and primary spokespeople for 360 Degrees of Financial Literacy.

In the News: Financial Literacy, Mobility, CPA Exam

The Times Daily in Alabama spoke with Mackey McNeill, CPA/PFS, and member of AICPA’s Financial Literacy Commission, about preparing college students to handle the responsibility of managing their own money. Without an understanding of the impact of their decisions, young adults can easily fall victim to overwhelming credit card debt and get behind on their student loan payments. McNeill says that one of the best ways to avoid that outcome is to begin teaching children about money long before they leave for college. “Our patterns about money are set before college, so if your kids are savers or spenders, you'll know before then; however, that doesn't mean you can't become better aware of the behavior and make difference choices,” she said.

In the News: Financial Literacy, Mortgage Interest

Jimmy Williamson, CPA, and member of the AICPA’s financial literacy commission spoke to the Contra Costa Times for an article about the Consumer Financial Protection Bureau. The CFPB, designed as a one-stop place for consumers to file complaints about financial products, is currently only handling credit card complaints. “Like any new federal agency it takes time for it to get its wheels rolling," said Williamson. “It's designed to help consumers make better financial decisions, if they are borrowing money for a home, if they are getting a credit card, those kinds of things. It's designed to improve transparency.”

Introducing the WLIFE Awards

What’s the value to employers who offer financial education to their staff? Research shows that workplace programs can:

• Reduce absenteeism
• Increase employee productivity
• Increase contributions to the company's retirement plans
• Increase employees’ allegiance to their company

To recognize organizations that are making a commitment to their employees well-being by offering exemplary workplace financial education efforts, and to encourage the implementation of such programs by more employers, the AICPA and the Society for Human Resource Management (SHRM) launched the Workplace Leaders in Financial Education Awards (WLIFE). This first-of-its-kind award started as a recommendation by the Subcommittee on Workplace Financial Education of George W. Bush’s President’s Advisory Council on Financial Literacy. According to a 2009 SHRM survey, 64 percent of employers offer financial education to workers.

Visit the website, wlife.org, to apply, find out more about the award and to learn how to develop or enhance a financial literacy program in your workplace. Winners will be announced October 2011. The AICPA and SHRM plan for this to be an annual award with Year 2 call for entries to begin March 2012. WLIFE is a facet of 360 Degrees of Financial Literacy, the volunteer effort of the CPA profession to improve the financial literacy of all Americans.  For more information about volunteering in your community, visit aicpa.org/financialliteracy or visit your state society’s website. 

Melora C. Heavey, Senior Manager – Communications, American Institute of CPAs. Melora manages the CPA profession’s volunteer effort, 360 Degrees of Financial Literacy, and the award-winning public service campaign, Feed the Pig.  She serves as the staff liaison to the National CPA Financial Literacy Commission, the leadership body and primary spokespeople for 360 Degrees of Financial Literacy.