GSCPA and Financial Literacy Week
Financial Literacy: A Broad Area for Which Knowledge Is Needed By All
By Michael A. McBride, CPA
The knowledge, skills and abilities required to execute successful personal financial initiatives during one’s lifetime is an area of continued learning. Every aspect of financial literacy: when to begin education and outreach, educational materials, and various initiatives cannot be covered in a single monthly article. Rather, financial literacy needs of primary school students, startup businesses, senior citizens, and lower wealth families are great items for this discussion. There is still a need and opportunity for CPAs to continue aide and assistance in all areas.
Appropriate Age to Begin Financial Literacy Education
Various schools of thought exist as to the best age to begin making students aware of financial literacy concepts. It ranges from primary school through high school grades. The Georgia Society of CPAs’ Financial Literacy Task Force has developed a product that addresses this spectrum. It is titled Millennial Money and is available on GSCPA website. This information is free for both GSCPA members and the public.
The Financial Literacy task force defines personal financial literacy as the ability to use knowledge and skills to effectively manage one’s financial resources to achieve and maintain lifelong financial security. Millennial Money gives students exposure to real world examples of how to make sound financial decisions. Through Millennial Money, instructors discuss and explain key terms including budget, compounding, credit, net worth, paycheck, basic income tax knowledge, wills, and various forms of insurance.
Financial Literacy for Startup Business Owners
At the other end of the spectrum, those pursuing a startup business are advised to seek basic financial literacy skills prior to opening a business. Every successful business owner needs basic skills in establishing a budget, understanding financial statements and measuring results, controlling costs, as well as familiarity with Federal, state and local tax statutes.
As with most financial literacy topics, a variety of curriculum exists. The FDIC’s Money Smart program is an excellent source. It can be supplemented with real world CPA experiences. Money Smart is free and can be downloaded or obtained in print here. Many financial literacy partners offer training in use of these products. Financial Literacy topics I stress during instruction include Budgeting, Balance Sheets, Cash Flow Projections, Profit and Loss Statements, and Business Financing.
Although taxes can be extremely complicated, startup business owner should obtain basic knowledge. Money Smart provides a comprehensive course that provides familiarity with various tax forms, managing tax obligations, purpose of major tax forms, employment taxes, and using and accountant. Real world examples bring this subject to life.
Financial Literacy for Senior Citizens
Many senior citizens have used extensive financial literacy skills most of their adult lives. Yet, as a result of progressing age, they may need to rely on financial advisors or a trusted party. Other senior citizens may have not used many financial literacy skills. In either case, senior citizens and/or their trusted parties can benefit from financial education and information.
“Financial Literacy for Mature Over 55” was developed by The Georgia Society of CPAs’ Financial Literacy Task Force to meet this need. It can be found on gscpa.org here.
Presentations can be made to seniors at libraries, senior care facilities, retirement associations, etc. Major topics discussed include: receipt of new Medicare cards, how to handle phishing calls (especially those pretending to be the IRS), how to handle unexpected home visits from strangers claiming to be from IRS, utility companies or other services, spoofing telephone calls, services that aide with robo calls, precautions with online ordering, information for trusted parties, emergency financial management plans and a list of trusted and helpful websites.
Financial Literacy for Lower Wealth Families
One can easily develop a fervent passion for providing financial literacy education to lower wealth families. Partners, philanthropic organizations, and curriculum are as plentiful as the population needing this service. Just let your desire to serve in this area be known and you will receive numerous service requests. The Georgia Consortium for Personal Financial Literacy partners with GSCPA in this area. In addition to attending Atlanta area meetings, GSCPA members can obtain information regarding financial literacy projects.
The IRS can be a great partner with respect to providing both education and financial benefits to lower wealth individuals. Stakeholder Partnerships, Education & Communication (SPEC) is the Outreach and Education arm of the Wage and Investment Division of the IRS. SPEC partners with community based organizations to gain access and provide service to lower income, elderly, disabled, Native Americans, non- English speaking and rural populations. SPEC manages the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) free tax preparation programs. In addition to free tax return preparation, a key principle of VITA is receipt of the Earned Income Tax Credit (EITC) by eligible taxpayers. Please see section 32 of the Internal Revenue Code for an exhaustive authorization of EITC. VITA services also provide an outstanding opportunity for subsequent presentation of various financial literacy subjects and services by numerous SPEC partners.
One need only further explore any of these topics and a wealth of need and opportunity can be found. Because CPAs possess unique skill sets in these areas, you may find very little preparation required to instruct classes. There is such a great need for education on financial literacy and the professional satisfaction can be overwhelming if you become involved.
Michael A. McBride, CPA, serves as the 2020 chairman of GSCPA Financial Literacy Task Force. He partners with numerous nonprofit organizations to provide financial literacy education. He can be reached at mikemcbridecpa@outlook.com.