Save for later, says financial educator

Cynthia Crawford is a big believer in planning.

“It’s so good to put your financial goals down on paper,” said Crawford, a family financial education specialist for the Saline County Extension Center at the University of Missouri.

And that is the first instruction she gave her students at Tuesday night’s Thrifty Living class at the Sedalia Senior Center. “Build Wealth, Not Debt” was the first in a series offered by State Fair Community College, University of Missouri Extension, Rotary International and Care Connection for Aging Services.

“Managing money is hard work, whether it’s a few zeroes or a lot of zeroes,” Crawford told her class of 24.

Crawford discussed saving and investing basics and introduced the students to financial markets.

“Sometimes I think I’m the only person in Missouri saying ‘Don’t spend everything you have.’ There’s always tomorrow,” Crawford said.
In 2006 the United States savings rate was at negative 1 percent, she said.

“It’s not healthy financially to spend everything and 1 percent more,” Crawford told the group. “People need to start saving for their retirement the first day of their first job. Most people aren’t looking forward to working until the day they die.”

Crawford said a good rule of thumb for saving is taking 10 percent of one’s income and socking it away.

"People who start saving in their 20s have a great time in their 50s,” she said.
The conversation eventually drifted from savings to investing.

“Savings and investment choices differ depending on long and short term goals,” she said. “With savings, you’re looking at fulfilling short-term needs or preparing for emergencies. Investments are for long-term growth, and the risk tends to vary depending on the product.

“If you’re giving a company 40 hours a week and you’re putting all of your retirement money in their plan, it’s just not a good idea,” Crawford told the group. “Ten percent should be all you put into your company’s retirement plan. A mutual fund is a way to diversify.”

A mutual fund brings together money from many people and invests it in stocks, bonds or other assets. Each investor in the fund owns shares, which represent a part of these holdings.

Crawford warned her students against buying into mutual funds that are “hot” in a 12-month period.

“I look at three- and five-year returns. I want to see a history of track record,” she said.
Cheryl Homan, of Sedalia, went to the class looking for specific information.

“I wanted to see if I was going to have anything for retirement,” Homan, 50, said. “I also wanted to understand what mutual funds were a little better, and I do.”

For the youngest in the class, it was a chance to learn how to go about investing.

“I’m going to be a little more proactive about where my retirement money goes,” said Brian Wood, 29, of La Monte. “I’m going to ask about hidden fees. It’s kind of like buying groceries. I don’t think anyone likes having fees they don’t know about.”

The next class will be Tuesday at the Sedalia Senior Center, where Crawford plans to focus on learning how to read credit reports, making a financial plan and avoiding investment fraud. The session will be free but requires registration.
For more information about how to sign up, call (660) 886-6908.