Q&A with financial literacy advocate Dan Hebert
For most of his career, Dan Hebert has worked in financial services – at finance companies, banks, credit unions and even S&Ls
For most of his career, Dan Hebert has worked in financial services – at finance companies, banks, credit unions and even S&Ls. But 13 years ago, he decided to switch careers, although not his focus.
That’s when he led the formation of the nonprofit NH Jump$tart Coalition, which is affiliated with the Jump$tart Coalition for Personal Financial Literacy, which is based in Washington, D.C. Today, NH Jump$tart remains an all-volunteer organization whose members share in the common belief that children need to understand how to manage their financial affairs in this complex environment.
Hebert, who also works with the national Jump$tart organization as its director of professional development, with a focus on teacher training, is spearheading the second annual Forum on the Financial Literacy of NH Families and Workers, which is scheduled to be held from 7:30 to 11:45 a.m., Feb. 11, at the Grappone Conference Center in Concord.
Q. Tell us a little about your financial services background.
A. My area of expertise was primarily in lending, collections and credit card administration. Of course, this was prior to the introduction of credit scoring, automated lending and Internet commerce. As a lender, it was my responsibility to evaluate each borrower and his or her application using common underwriting standards – debt to income capacity, credit history and collateral values. When a loan application was denied, it was our responsibility to advise the applicant on how to improve their situation so that the loan could be improved. Thinking back on it now, I was involved in financial education during those days and didn’t even know it.
Q. What led you to become so involved in the issue of personal finance and financial literacy?
A. During the late ‘90s, when New Hampshire was leading the nation in the percentage increase of bankruptcy filings, I noticed that the average cardholder age of our credit card losses was getting younger. At the same time, I was asked to speak at a state teacher conference about credit cards, and I was struck by how little the teachers knew how credit cards work, and more importantly, that this was not being taught in the schools. Since I had two kids in the school system at that time, one would think that I would know this, but I didn’t.
So in 1999, we began the process of formally organizing the coalition and we became incorporated in August 2000. I became so energized when talking to students or teachers and seeing them understand and appreciate the information, I left financial services in 2001 and never looked back.
Q. How does Jump$tart work?
A. The Jump$tart Coalition for Personal Financial Literacy is a coalition, an organization of organizations, that share an interest in advancing financial literacy among students in pre-kindergarten through college. Today, Jump$tart is a partnership of about 150 national organizations and entities from the corporate, nonprofit, academic, government and other sectors. Generally, these partner organizations conduct and/or support financial education or offer financial education tools and materials for youth and others.
In addition, each of the 49 state coalitions is an independently governed and operated nonprofit with its own leadership and bylaws.
It is important to point out that Jump$tart is not a “program” and does not have curriculum or products. In many ways, we are the cheerleaders for our national partner resources and services. For example, the Jump$tart National Clearinghouse contains over 800 different types of resources and almost 50 percent of them can be downloaded for free. The Jump$tart National Standards for Personal Finance was the basis of New Hampshire personal finance standard, which is listed in the economics curriculum frameworks approved by the state Board of Education in 2006.
Q. What’s the purpose of the upcoming financial literacy forum?
A. Research continues to show that parents are the largest influencers for their children in developing money management behaviors. We also know that financial stress can impact productivity in the workplace as well as at home.
We determined that if a key goal is to empower the next generation, we must work corroboratively to provide resources to New Hampshire workers and families through multiple channels. The idea is that if parents improve their financial behaviors as well as their expertise, this will have a powerful impact on their children.
It is clear that New Hampshire employers have a stake in the financial literacy of their employees. Managers recognize that when financial concerns spill over into workers’ responsibilities at the workplace, it is disturbing to employee performance and, consequently, to meeting company goals.
At the Forum on the Financial Education of NH Workers and Families, invited guests will learn about the impact of financial stress on New Hampshire workers and discuss how financial education can be one solution for positively impacting the workplace and the next generation of workers.
Q. What are the three biggest things employers should know about when considering how personal finance issues affect their employees?
Financial stress is complex. From generationally-specific issues (student loan indebtedness to caring for aging parents) to broader community concerns (lack of funding for social services associated with specific populations), it is clear that a one-size-fits-all approach will not work in addressing the financial education needs of the working adult population.
First, the most daunting financial challenges employers described as impacting financial stress included financial setbacks (loss of second income, medical expenses, increased cost of benefits has short-term and long-term implications); lack of savings (lack of knowledge about savings options, how compounding helps money grow and how to plan to meet financial goals); inability to retire (delayed retirement/no retirement planning); home value and home price issues (loss of home value impacts retirement plans and “safety net” for some employees, while the lack of affordable housing for young professionals in New Hampshire leads to a less stable and more transitional workforce).
Second, employers lack clear research and models that demonstrate the connection between employees’ financial literacy and companies’ overall goals for a productive workforce. Before delivery of financial education information, tools and services can begin, evidence-based research at the local level must support the benefit that employers, employees and communities gain as a result. Decision-makers will need successful financial education programs upon which to model their own programs.
Third, the next generation will not enter the workforce better prepared to manage their financial lives without more financial education. Young adults are starting out with lower salaries with higher student loan debts than generations before them. Yet they have a limited understanding of the cost of borrowing and how mismanaging a line of credit can result in negative repercussions for employment, future credit and eligibility for rental housing. While it is never too late to educate students about financial matters, core messages about spending, saving and borrowing are best taught to elementary-aged children and should continue through the education continuum to college.
Q. What's the difference between teaching children and adults about personal finance and financial literacy?
A. The biggest difference in my mind is time. Teaching children about personal finance is about molding their behavior to favorably impact future decision-making. Teaching adults about personal finance is about either correcting or improving their current situation to avoid or minimize problems down the road.
I hear parents say all the time, “I wish I would have learned about this earlier.” Many adults have learned about money management through the school of hard knocks. Teaching children today can break the cycle of financial illiteracy, which can only have a positive impact on our economy in the future.
Q. Do you see financial literacy – or the lack of it – as playing a role in the financial crisis and collapse of 2008?
A. Absolutely. I won’t say that financial education would have prevented the crisis, but I do believe it would have mitigated some of it. It was the perfect storm of contributing factors: lenders no longer having to say “no” to their customers – if they didn’t qualify for a traditional loan, they could upsell them to a loan that the lender would sell to investors (making it someone else’s problem) and the borrower couldn’t afford; technology becoming such a part of our lives that getting an immediate answer on that loan application or making a deposit through our phones placed money management on that superhighway of immediate gratification; and online commerce and transactions using plastic removed the psychological attachment to money. It feels a whole differently when you take out five $20 bills to buy that $100 item rather than swiping the card.
A financially literate consumer would have known that the subprime loan was unsustainable, would have known that buying stuff now with credit cards and paying for them later is a wrong strategy, and would have known not having any savings for emergencies is a recipe for stress and trouble.
At the end of the day, it isn’t complicated really. Identify needs versus wants, develop a savings habit for future protection, and use debt wisely. Financial education is important.
For more information about the Feb. 11 Forum on the Financial Literacy of NH Families and Workers, contact Hebert at 603-731-1812 or email@example.com.