If a stranger asked you, “Where did you learn about money?” you might furrow your brow and deflect the question. When Lisa Helme asks it, though, Vermonters more often than not open up and share what they consider to be some of their most tightly guarded secrets.
As the director of financial literacy for the Vermont state treasurer’s office, Helme is familiar with the angst that swirls around the dollars in our wallets and bank accounts — or the lack thereof.
A lean and energetic brunette, Helme has worked in communications or education for almost all of her career. She spends plenty of face time with Vermonters of all ages, offering tips on saving for retirement, using credit wisely and even saving or spending allowances. She says she’s discovered that, even when people know what they should do with their money, they don’t always do it. And she’s skilled at getting people to tell her why. “Money is not just about dollars and cents,” Helme says. “It’s power and emotion, and it’s one of the biggest taboos out there.”
Five years ago, when then-state treasurer Jeb Spaulding founded Vermont’s financial literacy office, he brought in Helme, who had previously served in the state’s Fish & Wildlife Department to, well, helm the program.
With the poise and eloquence of a newscaster (from her days as a broadcast journalist in Colorado), Helme launched herself into writing web content, producing newsletters and crafting curricula. She devises financial literacy strategies for Vermonters at all stages of life, but especially those planning for retirement.
“A lifetime of financial well-being is something that every Vermonter should have an opportunity to attain,” explains current state treasurer Beth Pearce. In the next breath, she notes that the state manages the retirement program for upward of 46,000 vested and retired employees. The implication is that when individuals plan well, everyone wins, including state government. “From our end, we want to help people develop those habits that will stay with them for a lifetime,” Pearce says.
Helme describes her office as a “mighty department of one.” From the initial focus on retirement, it gradually expanded its reach to other ages and populations, from National Guard troops about to deploy abroad to women in their thirties and forties. In 2010, the department began reaching out to children. It’s common knowledge among financial literacy experts — there are 36 such departments around the country — that parents don’t always pass along financial know-how to their offspring.
“When I teach, I ask people to raise their hands [to the question], ‘How many of you have never had your parents talk about money?’” says Helme, who holds workshops all over the state. “Most of the hands go up. Mine does, too.”
Helme, the daughter of an itinerant Air Force officer, says she was 20 before she sheepishly asked a bank clerk to show her how to balance her checkbook — because her parents never had. “I was so embarrassed,” she recalls. That experience acquainted her with the difficulty adults have discussing money. At home, children may pick up financial knowledge indirectly, such as when parents fight about money, Helme says. Some may learn only when they get their first job.
“You can have fun asking people, ‘How did you learn about money?’” Helme observes.
One of the programs her office rolled out for children is called Reading Is an Investment, which aims to teach personal-finance principles by providing elementary schools with children’s books on financial subjects. It also supplies lesson plans for teachers and librarians.
During the first year, about 1200 elementary school students took part in the program, keeping logs of what they read. In 2012, nearly 4000 reading logs on the themes of investing and goal setting were returned to Helme’s office. Over the last few months, kids at 130 Vermont schools have plowed though books with titles such as Isabel’s Car Wash and The Pickle Patch Bathtub. Helme says the reading list has grown to 70 titles.
“Children seem so enthusiastic to improve their money-management practices in small ways, so we love to see the program growing,” Pearce says.
Helme admits the technological age presents new challenges, even for adults, when it comes to managing money. For instance, salaries seem intangible when paychecks are deposited directly into our bank accounts, which we then use to pay bills online or with debit cards. “The whole electronic thing is a challenge,” she says. “Think about that psychologically — the number doesn’t mean anything.”
Two years ago, the Financial Industry Regulatory Authority conducted a study of national “financial capability,” i.e., knowing what to do with money. Vermonters ranked No. 8 out of the 50 states in terms of straight financial capability, but ranked a pitiful 41 in terms of “financial behavior” — that is, saving money, planning for the future and using credit wisely.
Helme takes the mixed data in stride. It motivates her to keep her office’s website — moneyed.vermont.gov — densely stocked with information “that people can access discreetly,” she says. “When you make decisions you regret, it doesn’t mean you’re a failure. But if you don’t have a lot of knowledge and make that first bad mistake, it can build up over time.”
To help avoid those mistakes, Helme offers the following three tips.
Talk about money openly with those closest to you — your partner and your children.
When it comes to money, “We keep the bad stuff hidden from each other,” Helme notes. “If you look at the research [around marriage], one of the biggest points of disagreement is money, not sex or anything else. But once you start looking at it, it’s not the monster you thought it was.”
As for parenting, Helme advises looking for “teachable moments,” which could be as mundane as taking money out of the bank. “Ask a little kid, ‘What’s an ATM?’ They might say it’s a magic money wall,” Helme says. “They watch us do this, yet we don’t explain.”
Handing out allowances, filling piggy banks, planning for a big-ticket purchase — Helme sees teaching opportunities in all those situations. And, though she thinks a salary number “will always seem high” to a small child, she stresses the importance of discussing paychecks and career paths with one’s offspring, particularly as they begin to plan for college. “We need to have these conversations about how much people get paid — as a pilot, as a teacher, as a restaurant owner,” Helme advises.
Use credit wisely, and stay abreast of your credit report.
Helme is troubled by a “play today, pay tomorrow” ethos she often sees, especially when it inspires people to take on high-interest payday loans. “If you use credit or loans, you’re giving away your ability to make a decision about that money in the future,” she says. “You might trade away a decision four years from now to take a vacation.”
Budgeting is the key to happiness, Helme suggests. She advocates for an “envelope system”— keeping budgeted amounts of cash for groceries, gas and other expenses in separate envelopes.
She also advises people to obtain and study their credit reports on a regular basis; by law, everyone is entitled to free annual credit reports from the three major credit-reporting companies.
Save as early as possible for your long-term goals, including retirement.
It’s a no-brainer and one that’s constantly hammered into our heads: The earlier we start saving for retirement, the better. Yet Helme knows firsthand how often people start late and then feel incapable of socking away enough. Uncertainty about the fixed incomes they’ll have after they stop working adds to the problem.
“We’ve moved from pensions to 401(k)s, and you need to be plugged in to what you need to put away,” Helme says. “People think you need to be good at math to save, but you don’t need to be. You just need to be good with a calculator.” And, of course, good at sticking to a budget.
This article was titled "Dollars and Sense" in print.