Education + saving = a solid financial future
University of Wisconsin Colleges and University of Wisconsin-Extension Chancellor David Wilson recently discussed the importance of financial know-how with Marilyn Holt-Smith, managing director for Holt-Smith & Yates Advisors, a national portfolio management firm based in Madison. Holt-Smith serves on both the UW-Extension Board of Visitors and the Small Business Development Center Advisory Council.
David Wilson
WILSON: Why is it important to be financially literate?
HOLT-SMITH: Recent surveys suggest that consumer education has not kept up with the rapid changes in the marketplace and that many Americans do not have adequate knowledge and skill in managing personal financial resources. Financial literacy is critical to building knowledgeable savers and investors, informed consumers and responsible citizens.
Individuals and families who can handle the complex financial decisions of daily life experience an enhanced quality of life, with the personal satisfaction of being in control of their lives and less likely to need financial assistance.
WILSON: What is the most important financial issue facing Wisconsin residents today?
Marilyn Holt-Smith
HOLT-SMITH: Many people today are not financially prepared for retirement. One of the biggest factors is the trend away from traditional pensions toward 401(k) savings plans, leaving employees with the responsibility for building sufficient savings.
According to the U.S. Census Bureau, the number of Wisconsin residents age 65 and over is projected to grow from 13% to 21% of the state's population over the next 25 years. If these retirees aren't adequately prepared, they will be dependent on state systems for care. It is critical for the overall well-being of Wisconsinites that we encourage our fellow residents to save and invest wisely for their retirement years.
WILSON: What is your number-one piece of financial advice for Wisconsin's people?
HOLT-SMITH: Education is step one. It is each person's responsibility to become financially literate. A number of educational resources are available for state residents interested in learning more about personal finance, including UW-Extension publications and seminars.
Step two is to start saving. Putting aside money every month is so important, but often it is the most difficult step. The ability to save, and enjoy compounded growth on those invested savings, is the key to a solid financial future.