For many college students, late fees on bills or overdraft fees on checking accounts are all too common –– and are signs of financial illiteracy.
With the inaugural Financial Literacy Conference, the University of Pittsburgh Business School and Alpha Kappa Psi, a professional business fraternity, hoped to help students avoid paying such fees in the future.
During four seminars in the William Pitt Union Friday, seven speakers prescribed antidotes to financial illiteracy, including taking Pitt’s new one-credit personal financial planning course, talking to parents and starting to save as soon as possible.
At the conference, presenters had sessions on budgeting in college and the real world, the consequences of money choices, understanding compensation packages and the working environment of different types of businesses.
“Financial literacy means understanding that the money you make doesn’t define your success. If you plan, budget and learn about its value, then you can use money to do things that make you happy. Money is a tool, so being financially literate means that you know how to use it,” said Alexis Bovalino, a senior marketing and human resources management major and member of the student conference board.
Connor Jobes, a senior political science major, said he understood the importance of financial literacy after his mother called him to catch up last week. She began asking about how he spent his money, if he budgeted and if he had a plan for the future.
“It struck me that I was really financially illiterate,” Jobes said. “The conference made me more aware of stuff I didn’t know to be looking for, like compensation packages. With personal finances, you learn as you go, so this is a head start.”
As former director of human resources at Microsoft and current manager of human resources at Puget Sound Energy, Tracy Turman explained compensation packages to Jobes and other students during her seminar.
“She put a lot of emphasis on ‘doing the dance’ in negotiating with a potential employer. She explained that people can miss out on a lot of benefits by not being proactive enough, and some employers will give low compensation packages expecting a negotiation,” Jobes said.
She made it clear that job-seekers shouldn’t feel inferior.
“Although this may be the first job you have in your professional career, don’t settle,” Turman said. “You are a very valuable asset to employers right now. Recognize it. Interview your interviewers as much as they interview you.”
Dean Owrey, vice president and CFO of UPMC, spoke to the “common person’s perspective” of financial literacy. Owrey, who said he grew up in a family of “scarcity” that was often anxious about money, recalled his first big purchases: a car, an engagement ring and a house.
Owrey, who married at 22 and bought his first house at 23, realized the importance of financial literacy during his first job at the consulting firm Ernst and Young, which exposed him to people at different stages of their career, academic and economic life.
“Success is unique to your own aspirations, but you need to ask, ‘Can I afford to meet my obligations?’” Owrey said.
He outlined seven guiding principles: “Live within your means,” “Pay yourself first,” “Think of your wants versus your needs,” “Share your money philosophy with your partner,” “Plan for the future,” “Surround yourself with what you want to become” and “Be responsible.”
In another session, students learned about work environments, particularly the difference between small shops and large corporations. Although small and large businesses differ on the income scale, Vic Bovalino, executive vice president of finance and operations at Hospitality Surefire Group –– a small business –– and Dominic Verdi, an Ernst Young partner at Assurance –– a large business –– said both models emphasize connections.
“What I learned very quickly is the personal impact you can have,” Bovalino said. “We’ve developed something that will leave a legacy.”
Surefire Restaurants Group previously owned and operated Uncle Sam’s Subs, Joe Mama’s and Fuel and Fuddle, but is now focused wholly on Burgatory, which now has eight locations.
According to the 2016 Wells Fargo Millennial Study, “three-quarters of millennials with student loan debt say their student loan is ‘unmanageable’ and 71 percent say it is holding them back from saving as much as they would like.”
The conference, which was open to students of any major, is the first of several in the works for the 2016-2017 academic year. According to Evan Turman, president of Alpha Kappa Psi, future events will be based off of student-survey feedback covering relevant topics such as refinancing student loans.
“Regardless of your major, the industry you work in or how old you are, you’re going to be faced with financial decisions,” Turman said. “It’s important to understand the implications and how to make the best decision for yourself.”