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Financial Expert Counsels MU Students on Money Management

Friday, February 17, 2012
Marymount University’s Students in Free Enterprise (SIFE) club recently sponsored a Financial  Literacy Seminar given by Theodore R. Daniels, president and CEO of the Society for Financial Education and Professional Development, Inc. The non-profit organization creates and delivers customized programs, including seminars for college students on “Credit Management” and “Personal Money Management.”

Daniels began by advising the Marymount student audience that now is the time to develop a disciplined plan for their future financial success. He noted that good coaching is necessary for all successful endeavors, and that even the letters in the word “COACH” stand for guidelines that will serve students well as they finish their schooling and enter the working world:

C – conviction: Pledge to manage financial resources.
O – overlearn: Be knowledgeable about all types of financial instruments.
A – adjust: Roll with the punches. Have an emergency fund in place.
C – consistency: Follow through. For example, if the plan is to save $50 per month, then make it happen.
H – honesty: “Walk the talk;” stick with the plan.

Daniels then moved on to specific tips for personal financial management. He advised the students not to live from payday to payday, but practice long-term cash management; to use credit responsibly; to practice risk management, which means to protect assets with insurance; and to develop a good estate plan that will lead to financial independence.

Daniels stressed, “The availability of credit, and how it’s handled or mishandled, is probably the most dangerous for those just starting out.” He advised students to get a credit card by the end of their junior year, in order to establish a credit history. “But credit cards should be used for needs, not wants,” he cautioned “Your credit card balance should never be more than one-third of your credit limit, or the debt-to-limit ratio. Any higher percentage will lower your credit rating, which negatively affects your borrowing ability in other areas of your life, like getting a loan to buy a house.” Daniels added, “There will always be a loan out there. It just depend how much you pay for it.”

He also emphasized that even as college students, it’s important to start preparing for retirement as part of their long-range financial plan. “You can no longer depend on a pension,” Daniels explained, “so it’s imperative to understand and make investments that will increase in value. A rule of thumb would be that higher risk investments produce higher yields and are more suited to the young. So a portfolio for a twenty-something would be more heavily weighted to equities than bonds, but a balance of the two can be found in the various types of mutual funds. Risk allocation depends on life stages, but start to save and you’ll never be broke.”

 Daniels concluded by highlighting four takeaways essential to financial literacy and freedom: “Always have an emergency fund; stay out of or reduce debts; invest for the future; and follow a financial plan.”
 
Catherine Nababinge, B.B.A, M.B.A. ’12, appreciated the pragmatic advice offered by Mr. Daniels, who has served on the Financial Advisory Boards of both President George W. Bush and President Barack Obama. She explained, “The seminar provided us with essential financial knowledge. I personally got to learn of several key elements necessary for me to be in excellent financial standing. What I got from this seminar is going to help me become more financially responsible and help me to prepare better for life after school.”