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 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.”
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.
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.”