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Panelists offer Culver seniors diverse ideas on sound financial practices

Tom Coyne

J.D. Uebler, director of The Ron Rubin School for the Entrepreneur, leads a panel discussion on financial literacy. (Photo by Andrew Crowell)

 

A panel made up of financial experts and other professionals told Culver Academies seniors they should live frugally when they graduate from college, avoid credit card debt, accumulate a stash of cash they can easily access in emergencies and start saving early for retirement.

“Being financially literate is a life skill that demands attention due to the harsh consequences of being financially illiterate,” warned J.D. Uebler, director of The Ron Rubin School for the Entrepreneur, which organized the hourlong financial literacy panel for Culver Academies seniors.

One of the goals of the program was to show students that personal finance is a behavior that everyone approaches in different ways. But it also sought to show that there are some basic principles that people should follow to be financially sound and avoid going into debt.

One common theme from the experts was that people should know where their money is going.

“My challenge to you is to track all of your expenses, everything coming in and going out,” said Kami Triplett, who as controller of Culver Academies oversees and manages the accounting and financial operations of the school.

Saralena Barry ’13, chief of staff at Axelrod Strategies and producer of the Axe Files Podcast, told students they should be aware of what they are spending money on and why certain months they are spending more than others.

Barry said she uses a bank app to track her spending.

The panelists also advocated saving ahead of time for big purchases, like a car, rather than financing the purchase.

“Because you are going to pay a significant amount more for that car by paying for it over time as opposed to saving it and earning that interest,” said Alan Alderfer, a certified financial planner practitioner and an executive at Alderfer Bergen & Co. in Warsaw, Indiana.

 

Craig Kempler '95, portfolio manager at Janus Henderson Investors in Chicago, said saving a couple of dollars a day can turn into a huge sum of money. (Photo by Andrew Crowell)

 

Craig Kempler ’95, portfolio manager at Janus Henderson Investors in Chicago, suggested starting early saving and breaking it up into little pieces.

“If you can quite frankly save a couple of dollars a day, $3 a day, that can turn into a huge sum of money over the longer term,” he said. “The earlier you start, the better off you will be.”

Several of the panelists told students that as soon as possible they should try to save six months of income in case they become unemployed or face some unexpected purchase. 

Alderfer recommended that for the first two years after graduating from college the students continue living like a college student. He said it will allow them to pay off their college loans more quickly. For those who don’t have college loans, they will have a solid savings so they will be ahead of their peers financially.

The panel also advocated for using credit cards as a tool, telling students they should seek to get cash back or rewards, such as points toward free flights or free hotel stays. They told students they should only use credit cards for costs they can pay off that month or they will be paying 16 percent to 20 percent interest or more.

“That adds up, especially as the numbers get significantly bigger,” Kempler said.

Barry also warned students that when they get to college, especially during welcome week, they will be inundated with offers of free gifts to sign up for a credit card.

“Don’t get trapped by this,” she said.

Pam Christiansen, director of development at Culver Academies, agreed.

“You don’t need that T-shirt or that water bottle or whatever it is they’re giving you as a free gift,” Christiansen said.

Alderfer said the most important thing to understand is that a credit card is a loan.

“Make sure that before you ever swipe the card and buy something that you know that you’re going to have the cash flow later on that month to be able to pay it off,” Alderfer said.

 

Seniors at Culver Academies listen to panelists talk about sound financial practices. (Photo by Andrew Crowell)

 

He said with 16 percent interest or more, it becomes harder to pay off the next month. He said he’s seen people with 10 or 12 credit cards.

“It can basically spiral you down and you may never be able to get out of it without help or without filing for bankruptcy,” he said.

The panelists also explained how saving regularly gives them the power of compounding, which is basically earning interest on interest and money saved. Kempler told the students that if they took $1,000 a year and put it into a high-quality investment for 10 years, they would have $80,000 after 30 years. 

“Now we’re talking about real money,” Kempler said.

Alderfer said no amount is too small to save. He suggested saving 20 percent of your income for retirement.

“If you save 20 percent of what you make, you will be successful and you will retire wealthy. I don’t care how much money you make,” Alderfer said.

Triplett said her advice is don’t borrow from your retirement fund to pay for emergencies.

The panelists also told students that they should contribute to their employers’ retirement offerings to at least receive the available matching funds, calling it free money.

Alderfer said some employers offer to match 6 percent of an employee’s overall salary, which means if someone is earning $50,000 a year, the employer’s match would be an additional $3,000 to both the employer’s and employee’s contributions.

The panel finished by telling students to make sure they understand the available benefits when they accept a job.

“Ask the questions you don’t know,” Barry said. “Don’t be afraid to go to HR and ask questions.”

The Ron Rubin School for the Entrepreneur annually provides financial literacy education for seniors through Student Life’s programming, and The Rubin School offers the Financial Literacy course for any Culver student.

Panelists Alan Alderfer, an executive at Alderfer Bergen & Co., Saralena Barry ’13, chief of staff at Axelrod Strategies, Pam Christiansen, director of development at Culver Academies, Craig Kempler ’95, portfolio manager at Janus Henderson Investors, and Kami Triplett, controller of Culver Academies. (Photo by Andrew Crowell)

 

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