Financial literacy: ‘It’s not about how big your paycheck is; it’s what you do with it’

By David Pendered

David Malone says he learned more than he ever expected from the SunTrust financial literacy program offered by his employer. The program might even prove to be life changing, depending on how he and his wife decide to implement its lessons.

SunTrust’s Tim Thompson leads an Ignite Session at Gas South. Nearly three-quarters of Gas South’s 225 employees have or are participating in SunTrust’s Momentum onUp financial literacy program. Credit: Gas South

SunTrust is expanding Momentum onUp, its financial literacy program, by collaborating with corporate partners including Malone’s employer, Gas South. The outreach intends to fulfill an aspect of SunTrust’s mission of community service, according to Jenna Kelly, president and CEO of SunTrust’s Atlanta division.

Malone said felt he had a good sense of financial management even before completing all eight pillars of onUp. He earned a masters degree in economics from Florida State University and now serves as Gas South’s marketing director.

The program provided him with some new ways of considering personal finance. One such principle is to figure out what things are truly of value – travel, retirement, charity, children’s education – and put resources there instead of, say, a $5 cup of designer coffee on the way to the office.

“My wife and I had a really good conversation,” Malone said. “I’m a person who thinks about financials more than other people. But my wife and I had never had a conversation about our financial values – what are things that we’re allocating resources to that have absolutely no value.”

David Malone

David Malone

So the couple followed the program’s guidelines and wrote down a list of 15 values. One surprising outcome assuaged Malone’s guilt over the amount he spends on his hobby – photography.

“I’m very much into photography; it’s a thing I like to do,” Malone said. “I always have a sense of guilt about how much I spend on photo equipment. But there are a lot of things I don’t spend money on. We have two cars, nine and 11 years old. We don’t buy new cars. But I have a $3,000 camera. I’m spending on things that I value, not on things that are nice to have but not of value.”

Kelly said SunTrust decided to expand the program after seeing the positive results as 15,000 SunTrust employees of all levels went through the voluntary program. Kelly emphasized the notion that onUp intends to provide useful information no matter how much, or little, financial literacy one may have.

“Findings would tell you financial stress affects across income spectrums, across all education levels,” Kelly said. “Some folks may be very good at balancing a checkbook, but haven’t created a budget or calculated their own net worth. Some need basic steps, such as how to start socking away a little money. There is no ‘one size fits all.’ People are at all different levels. People are at all understandings.”

Such is the case at Gas South. The company has incentivized the program by paying $100 to enroll and $100 to complete at least part of the program. Some 162 employees, out of 225, are participating.

Jenna Kelly

Jenna Kelly

Kelly considered the notion that financial literacy programs provided by the federal government haven’t had much impact. For instance, the U.S. Government Accountability Office reported that, “consumers could benefit from a better understanding of financial matters.” More than 20 federal agencies provide more than 50 different programs, “raising concerns about fragmentation and potential duplication of effort.”

Kelly responded that banks are in a unique position.

“Part of what a bank does in building community, helping all constituents to build a business or buy a home, is part of our business anyway,” Kelly said. “We have connectivity to our clients and community. We have access to these folks and can help change the conversation and give tips so they can get to a better place.

“We have 40 percent of Americans who don’t have $2,000 in an emergency fund,” Kelly said. “We can give individuals the easy steps to start to understand net worth, credit scores, to create a budget, to put money aside and have an emergency savings fund before getting to bigger picture things like retirement.”

Malone didn’t mention retirement. He did mention having the means to weather a calamity.

“A lot of people are not financially free; they’re prisoners to their job, prisoner to working a long, long time,” Malone said. “I know numerous people like that, and numerous people who live below their means and, if they lose their job or their car breaks down, they can weather that without being thrown off course.

“It’s not about how big your paycheck is,” Malone said. “It’s what you do with it.”

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

7 replies
  1. Burroughston Broch says:

    My grandfather said a different way, “It’s no matter how much money goes through your fingers – it’s how much sticks to your fingers.”Report

    Reply
  2. Andrew Keenan says:

    David,
    Thanks for this article. Financial literacy is critical, now more than ever. Establishing a budget and creating an emergency fund is a good start. Even small actions now can make huge differences in the future–especially if compounding interest is working for or against you. Important question: Is SunTrust acting in a fiduciary capacity when they give advice during these programs? Don’t all banks have conflicts of interest because they recommend, sell and make commissions on investment products?Report

    Reply
    • SaportaReport  says:

      Hello, Andrew,
      I checked with SunTrust and received this response:
      “Momentum onUp instructors are not acting in a fiduciary capacity because they do not manage financial assets for program participants or make investment recommendations. SunTrust does not promote or sell its products in any way through Momentum onUp, so there is no conflict of interest. This workplace financial wellness program is offered to companies for their employees as a not-for-profit program.”
      Best,
      DavidReport

      Reply
      • Burroughston Broch says:

        Lawyer weasel words. How can a for-profit company (SunTrust) legally provide a not-for-profit program that promotes its products?Report

        Reply
  3. Greg says:

    Shelling out 5 bucks for a cup of “designer” java is NOT good financial management (or good common sense either, for that matter) ……whether one is a high school graduate, or has a Masters in Economics.Report

    Reply
  4. Burroughston Broch says:

    According to Deutsche Bank Research, Americans with the lowest 20% of income spend 40% of their income on luxuries. There’s an opportunity for training.Report

    Reply
    • Dan Valdes says:

      The more education we have about finances and every day choices – the better. Like the article mentions, compounding interest can either work to your advantage or greatly to your disadvantage – a lesson I wished I had learned at 25 instead of later in life.Report

      Reply

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