Good morning! Today, we’re participating in a financial literacy roundup organized by Shannon from The Heavy Purse. The theme is about realizing how important money is for living a good life.
To me, understanding finances early on is crucial to avoid costly mistakes for the rest of your life. As a student, I was fortunate to have my finances in order, mainly thanks to my parents, since financial discussions were rare at school.
I figured out early that working hard and saving diligently could help me achieve the freedom and lifestyle I wanted. But not all students had this mindset; many were completely lost when it came to managing money.
That’s why today, as we work to raise awareness about financial literacy, I’ve interviewed Gene Natali. He co-authored a book called “The Missing Semester” to help students become financially savvy. Enjoy!
Can you please introduce yourself and your project?
I’m Gene Natali, Jr., a Senior Vice President at C.S. McKee, L.P., a Pittsburgh-based institutional investment firm. I have a bachelor’s degree in economics from Allegheny College and an MBA with a finance concentration from Carnegie Mellon University’s Tepper School of Business. Currently, I’m a Level III candidate for Chartered Financial Analyst accreditation.
I co-authored “The Missing Semester,” an award-winning financial guide for young adults. It’s used by high schools, colleges, and organizations nationwide. The goal is to equip readers with the financial knowledge they need.
Why did you feel the need to write The Missing Semester?
We saw friends, family, and acquaintances who were well-educated and had good jobs but faced significant financial challenges because they weren’t taught how to avoid mistakes and make smart money decisions. We call this essential knowledge “Money 101.” We hoped that if young people learned these lessons early, they’d be better prepared for future financial decisions.
Every American faces financial decisions, whether they become teachers, doctors, mechanics, engineers, or even dropouts. Proper preparation can help people avoid mistakes and ultimately achieve financial freedom.
In your book, you cover basics like personal finance, debt, interest, and student loans. Should these topics be taught in schools?
Absolutely! And more importantly, students think so too. From our classroom experiences and feedback from readers, we know students are genuinely interested. During the school year, I often speak at high schools and colleges, and the enthusiasm is inspiring.
What is the state of student financial literacy these days?
National statistics suggest that student financial literacy is poor but improving in some areas. I spoke with a Senator from Utah who said, “Thank you, but we’ve set a pretty low bar, and we have a lot of work to do.” This captures the situation well.
The good news is that many people and organizations are working hard to enhance student financial literacy. Groups like Jump$tart, Junior Achievement, and EverFi, as well as countless personal finance bloggers, writers, and journalists, are dedicated to this cause. With so many options available, motivated students can find resources that suit their personal needs.
How can a young adult make sure they get a great start financially?
Start now. Recognize that being young is an advantage. While you can catch up later, it’s better to get a head start. Saving even a small amount consistently can make a big difference by the time you retire.
Educating yourself and having a financial plan is crucial. One useful assignment we highlight in “The Missing Semester” involves creating a personal financial plan with 1-year, 3-year, and 5-year goals. It’s exciting to see the detailed plans students come up with, and the feedback has been very positive.
Is it more important to manage small college expenses or choose a cheaper college that offers a quality degree?
Education is vital, whether it’s through college or other forms. It’s essential to consider your career path and the costs associated with it. For example, you wouldn’t want to graduate with significant debt if your career has low earning potential. Having a financial plan helps you consider different paths and manage future expenses and income.
You recommend starting to invest early. When people are torn between paying off student loans and saving for a house or retirement, what do you suggest?
If your company offers a 401(k) match, contribute the maximum immediately; it’s like a pay raise. For those without a 401(k), balancing loan repayment and saving is key. For instance, contribute a small amount to a Roth IRA while focusing primarily on repaying student loans. This approach sets a foundation for future saving.
What advice do you have for a young graduate who made financial mistakes in college and wants to get back on track?
Recognizing the need to get your finances together is the first step. Be realistic about your goals, spending, and saving needs. Create a budget and stick to it. For example, a recent graduate who owed $22,000 in loans and credit card debt managed to pay off her loans in 18 months after reading “The Missing Semester.” Instead of buying a reward item, she started a Roth IRA. Let your savings dictate your spending, not the other way around.
If you have any questions for Gene, please share them in the comments below!