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Financial ignorance can take toll at work, home

It’s July, and for many business owners, mid-year is an opportune time for a financial reset to keep the year’s goal in focus to alleviate headaches later. It’s the same for individuals, and growing financial stresses may create workplace and productivity problems for them and their employer.

Three in four Americans report they’re experiencing financial stress. In addition, 60 percent of millennials say they have trouble finding $2,000 to cover unexpected finances, and 40 percent of Americans said they would have trouble finding $2,000 if a problem unexpectedly surfaced, according to David Camden, regional president of SunTrust Bank.

But most people aren’t talking about it, said Camden. “Financial situations are rarely discussed because they’re seen as taboo or embarrassing. But these financial situations can cause tremendous stress,” Camden said. “We’re trying to say, ‘Hey, let’s talk about it!’ We want to show consumers the steps to get on the path to financial well-being.”

Reaching younger consumers

Camden helps run SunTrust Bank’s new financial wellness program and website, Momentum onUp, which is part of larger trend of financial literary programs and nonprofits sprouting up across the country to help educate on how to budget and create a financial plan that will ultimately lessen their stress levels.

“Our children are not getting exposed to financial literary in an effective manner, through high school and even college. A lot of time they graduate, they come out with very little education around personal finance,” Camden said. “At the same time, a lot of entrepreneurs enter a business and don’t have a deep financial acumen. They may know their product, but financials present a big gap for them.”

In addition, Camden explained, it can be a challenge to dedicate time to making a financial plan. “It’s not easy to get pay stubs and credit card statements. You’ve got to be willing to invest the time. People need to be convinced there’s a benefit,” Camden continued.

The Momentum onUp program provides one-on-one sessions, as well as online resources to help consumers establish financial goals, start bank savings accounts, and understand their expenses and spending habits better.

Several quick tips for creating and maintaining a budget, according to Camden, are to start as soon as possible; put a spending plan in writing and keep it in sight; save – do not spend – unexpected windfalls (for example, a work bonus or proceeds from a garage sale); eliminate expenses for items or services rarely used; before taking on an additional expense (such as a new pet or new car payment), evaluate the impact on the current budget; and know where one can skimp, and where one can’t (Camden used an example of having a haircut every six weeks instead of every four will benefit you financially).

“We start with asking our consumers about their values — what’s important to you? We also want to know what they’re worried about financially. And how their values tie into their finances. Maybe shopping or traveling is important to you. Nobody likes to talk about a budget, but you need to talk about it,” said Camden.

Basics for the community

A local nonprofit supported by United Way, Consumer Credit Counseling Services of Savannah, is another program offering financial literacy classes to the Savannah community.

“When you go to school, they’ll teach you about sex education and drugs, but there aren’t those types of classes that teach you how to open a bank account or how to establish credit. We don’t have these financial tenets in our education systems,” said John Wills, President of CCCSS.

According to Wills, there are two ways to affect a budget: Look at the ways to increase income and look at the ways to decrease expenses.

CCCSS serves mainly low to moderate income families, but it’s not just low income families that face financial challenges. “The more money you make, the more you spend. It comes down to how to manage what you have. It hits the whole spectrum. I’ve seen low income families be very creative with their budgets and make it work.”

In order to create a solid financial plan and create a mid-year budget, Wills suggests tracking spending, keeping a spending diary, and understanding where the money is going.

“What are your flexible expenses? Is it going out to eat, entertainment, gift giving? Try to find more creative ways to save in those categories. Once you find ways to save in those categories, you need to try and put the money away to save. You can then save money for infrequent and unforeseen expenses. Most families don’t have savings set aside. They then have to borrow — that’s when it can be trickier,” said Wills.

To save money on food, consumers can grow their own food, fish, and have chicken coops. “You can also use coupons, buy in bulk, and do meal planning so you don’t overspend and waste food.”

When it comes to entertainment, rent a movie from the library, advised Wills. With gift giving, draw names in big families, advised Wills. And when looking at insurance, shop around to understand the range of rates offered.

“With our program, we discuss credit, banking basics, how to shop for a credit card or loan, and give a free education on financial planning,” continued Wills. “Prevention education is one of the most effective ways. We don’t want people to be overridden with debt or have their home go into foreclosure.”

Knowledge to counter stress

Tina Browning is the program coordinator at Queensborough National Bank &Trust Co.’s financial wellness program, Q Works and Financial Literacy.

“Financial stress is a killer,” said Browning. “Putting money aside can help alleviate stress.”

Q Works and Financial Literacy aims to inspire people to be financially savvy through workshops that help consumers understand credit, budgeting, and basic investing.

“Sixty-one percent of Americans live paycheck to paycheck to paycheck. Earning an increased income doesn’t necessarily solve their problems; people with salaries over $100,000 are still living paycheck to paycheck. We work with people to stabilize their financial situations,” said Browning.

In Savannah, more than a quarter of the city’s residents live in poverty.

Step Up Savannah is a nonprofit established to improve economic mobility and financial stability for Savannah families. In 2009, Step Up teamed up with the Banking Taskforce, the City of Savannah, the Federal Deposit Insurance Corporation, and the Federal Reserve Bank of Atlanta, and created a program called Bank On Savannah.

With the help of participating local banks, Bank On Savannah encourages people to open bank accounts because they’re safe, inexpensive, and help people save for the future and plan for emergencies. Bank On Savannah currently has ten local banks in the program.

“The first thing people need to understand is where the money goes versus where the money went. That’s the importance of a budget,” said Jen Singeisen, executive director, of Step Up Savannah. “Having that information is empowering on where your priorities are and where your immediate financial needs are. Through Step Up, we do financial education.”

Singeisen cited an example to help better one’s understanding of saving money.

“At the end of each week from now until the end of the year, put away a dollar for each week, meaning one dollar the first week, two dollars the following week, three dollars for the third week, et cetera. This will show how money can grow and that it’s not very challenging,” Singeisen said. “By the end of the year, the person will have a nice holiday fund of about $378, which isn’t bad. He or she can then can start the new year not having any debt leftover from the holidays.”

More Info

Breakout Box: 

Financial literacy resources

SunTrust: Momentum onUp.com

Queensborough National Bank& Trust: https://www.qnbtrust.com/Resources/Learning-Center/Financial-Literacy

Step Up Savannah: Bank On Savannah, http://stepupsavannah.org/bankonsavannah/

Consumer Credit Counseling Service: http://www.cccssavannah.org/

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