Tag Archives: Financial Literacy Month

Financial Literacy During Uncertain Times

From Girl Scouts of the USA

From our sense of security and wellbeing to canceled troop activities, graduations, and birthdays, the COVID-19 pandemic has affected all aspects of our lives. For so many of us, the ongoing uncertainty means having to navigate difficult situations. So this April—for Financial Literacy Month—we’ve partnered with Morgan Stanley’s Financial Advisors to answer a few of the questions you submitted on Facebook and Instagram. Check them out!

Jeri Salmond, Financial Advisor 
A credit score is an important number that summarizes your credit history and credit worthiness. The score helps lenders determine how likely you will pay your debt and on time. Credit scores will change over time. It is very important to keep track of your credit score and find out how the amount of debt, your payment history, as well as the types of debt you hold affect your credit score. There are several different tracking tools that can be used for free to track your credit score without affecting your score. It is important to start building a credit score when you are younger. Having no credit is almost as bad as having a low credit score. Many people start with having a small credit card or secured credit card to make small purchases and pay off monthly. The more you make on time payments and keep your debt low, the more your credit score will increase. The better your score the more likely you will receive a preferred interest rate. Credit is usually needed for large purchases in which you may not have the immediate cash savings required for purchase such as paying for college, purchasing a car, starting a business, or buying a home. Having a good credit score allows you to purchase the item on credit while making monthly payments in order to pay off the debt. 

Michelle Ward, Financial Advisor

Good savings habits can help you achieve financial freedom. We recommend that you start saving early, automatically and often. This gives you the opportunity to benefit from “compound interest,” which is simply earning interest on the interest you earned the previous month. The longer you compound, the greater the effect. Pay yourself first, before you begin to pay optional expenses and make discretionary purchases. Treat your savings like any other expense and give it priority over optional expenses. Consider how much you can save annually by cutting out common habits, like buying coffee or eating out and think about making automatic, periodic deposits to savings accounts on a monthly basis. Your savings will help when you have an emergency fund for unexpected expenses, achieve short-term goals, like going on a trip, and longer-term ones, like buying a house or choosing an occupation that you love without having to weigh in how much will you earn. 

Teri Kelley, Financial Advisor
Creating a budget is always a helpful approach as it allows you to see your cash flow. Once you do that, you can identify essentials, like your rent/mortgage, utilities, medicine, transportation costs and food (needs) and pay those fixed bills first before paying for non-essential items like clothes, games, etc. (wants). In times of crisis that affect your finances like the loss of a job, you really have to stick to the basics and make necessary adjustments. You may need to defer or reduce payments on things like; saving contributions, credit card payments, etc. And remember, that hopefully this is just a temporary adjustment and once things get back to “normal”, you’ll be able to resume things you may have had to give up.

Jane Rojas, Financial Advisor
My suggestion to prioritizing bills when you are short on cash is to stand back, look at what is most important to your life, and decide what needs your immediate attention – and write that out from most important to least important. This should include thoughts about what you can’t live without: electricity, rent, etc. Then I would look at the actual cost of not paying each bill each month: a credit card may not be urgent, but if you don’t pay it, there could be late fees plus interest of 20% or more on top of that. Last – negotiate when you can on how to stretch out your payments in a way that you don’t get the high cost of ignoring them, but to a point that makes them manageable.
When you get the short-term problems fixed, then work on the bigger problem of not having enough cash for the bills you have. Look again at what is most important and look at how you might reduce the cost of each of them: move to a lower-cost apartment, get a cheaper phone or phone plan, do your own nails. The key to success is spending less than you make, NOT MORE.

Kate Waters, Financial Advisor

The goal should always be to have as little debt as possible, but there are certain instances where debt can be “good debt.” For instance, if you think you can get a better-paying job by going to college or going for your master’s, medical, or law degree, then it might be smart to take on a student loan if you can’t afford it all on your own. This also holds true for buying a home. In both instances, you need to understand how long it will take to pay off and to make sure there is potential for a positive longer-term return on your investment. You also need to make sure the additional expense of the loan fits within your budget and be prudent about paying it down. By being diligent about your personal finances and responsible about paying down debt, you can be well on your way to being debt-free! 
To help build girls’ confidence, Girl Scouts has developed Financial Literacy badges that your girl can start earning today! The badge activities are based on real-life situations, such as budgeting and philanthropy, to give girls a deeper understanding of financial literacy power their future life success! You can also check out Girl Scouts at Home—our hub of online activities, including some for financial literacy!

 

Thien Le, Financial Advisor

The first financial lesson is to learn how to set goals. Setting goals is a great way to determine what to save for and to stay focused on your financial objectives and your reasons for saving. Bucket each goal into short term, medium term, and long term. Short term could be buying a new car, while long term could be retirement; which it’s never too early to think about. Start saving now as soon as you have earned income from your part time job or when you begin to work full time. When my 16-year-old daughter got her first job as a math tutor, I opened a retirement account for her to encourage her to save a little each month. Lastly, don’t be afraid of investing, and learn how to do it. Staying focused and keeping money invested in the market can be rewarding over time, but it may require patience and a long investment horizon. With market volatility, people often panic and make irrational decisions, so it is important to review your goals and remain focused on your investment objectives. 

Lisa Benton, Financial Advisor

An emergency savings fund is money that you have set aside for unexpected life events, such as losing a job or paying for a broken-down car. It’s a good idea for everyone to create one. When you are first starting, aim to save a few hundred dollars in a separate savings account. A convenient way to do this is by establishing a direct deposit for your emergency savings account. This allows the funds to be transferred into your account automatically. The ultimate goal will be to save three to six months of your take-home pay as a cushion for life’s uncertainties. Remember that this can be done gradually as your cash flow allows. One of the best ways to be financially savvy is to plan and that includes planning for the unexpected. 
To help build girls’ confidence, Girl Scouts has developed Financial Literacy badges that your girl can start earning today! The badge activities are based on real-life situations, such as budgeting and philanthropy, to give girls a deeper understanding of financial literacy power their future life success! You can also check out Girl Scouts at Home—our brand-new hub of online activities, including some for financial literacy!
We want to hear how your girl is using her Girl Scout skills by taking initiative, caring for the community, and Girl Scouting at home. She can send in her story here.

Financial literacy requires more than a piggy bank

Financial-Literacy-Month_17_Social-Media_Blog

From Girl Scouts of the USA

Some skills come naturally to us, but for many Americans, learning to be savvy with money takes a lot of work. To help people improve their command of currency, the U.S. Senate in 2004 designated April as Financial Literacy Month. In the spirit of this theme, we’re reflecting on the unique Girl Scout programs that prepare girls to take charge of their financial educations and futures. According to the Girl Scout Research Institute study Having It All: Girls and Financial Literacy, girls know they need a solid financial foundation, but few feel confident about their skills.

To help build girls’ confidence, Girl Scouts of the USA (GSUSA) has developed 11 Financial Literacy badges that girls can earn in addition to the badges for Cookie Business. Based on real-life situations, such as budgeting and philanthropy, the badges give young women a deeper understanding of financial literacy, empowering them for future life success.

For girls in underserved communities, we’re proud to continue the “Driving My Financial Future” program, a partnership with Toyota Financial Services (TFS). The program’s goal is to help more than 40,000 girls become financially proficient leaders, learn real-life and age-appropriate financial skills, and develop tools that inspire positive change in their communities. GSUSA interim CEO Sylvia Acevedo expressed, “It’s always gratifying to collaborate with partners such as Toyota Financial Services that understand the importance of instilling financial empowerment in girls and young women, and share the Girl Scout mission of investment in leadership development for our future trailblazers.” Since 2007, TFS has also sponsored the Making Life Easier program, which to date has awarded college scholarships to 1,000 students affiliated with nonprofits, including Girl Scouts.

From coast to coast, the girls who participate in the TFS “Driving My Financial Future”  program receive their own copy of The Girl’s Guide to Girl Scouting (which helps them earn their Financial Literacy badges) and a TFS participant patch. Girl Scout Juniors, Cadettes, Seniors, and Ambassadors also take part in financial planning activities to grow their finance skills by practicing how they’d handle real-life scenarios, such as saving for college or starting to build good credit.

Learn more about the program, which communities participate, and our partnership with Toyota Financial Services.