<p>We all want to earn and save more money, but studies indicate only 57 percent of U.S. adults are financially literate. In this episode, get on the pathway to financial enlightenment with hosts Kevin Abbed and Kristy Parola, who are joined by special guests Hassan Thomas and Remy Green, the creators of the financial literacy brand and podcast <a href="https://fyiflipodcast.mailchimpsites.com/">FYI FLI</a>, (For Your Information: Financial Literacy and Investing). This information-packed episode provides listeners with actionable financial advice, defines key financial terminology and addresses tough questions faced by emerging professionals, such as whether to rent or buy homes and how to start saving for retirement.<br /><br /><a href="https://kite.link/FYIFLI">Listen to FYI FLI</a> on your preferred podcast platform.<br /><br />Subscribe to <em>Career Compass</em> on Apple Podcasts, Google Play, Spotify, Stitcher or wherever you listen to podcasts. Check out <a href="https://www.shrm.org/hr-today/news/Pages/Podcasts.aspx">SHRM.org/podcasts</a> to listen to all of our episodes and also hear more podcasts from SHRM. And, be sure to rate and review the show on Apple Podcasts or your podcatcher of choice.<br /><br />Keep up with SHRM online and follow us on <a href="https://www.facebook.com/societyforhumanresourcemanagement">Facebook</a>, <a href="https://www.linkedin.com/company/shrm/">LinkedIn</a>, <a href="https://twitter.com/SHRM">Twitter</a> and <a href="https://www.instagram.com/shrmofficial/?hl=en">Instagram</a>.</p>
We all want to earn and save more money, but studies indicate only 57 percent of U.S. adults are financially literate. In this episode, get on the pathway to financial enlightenment with hosts Kevin Abbed and Kristy Parola, who are joined by special guests Hassan Thomas and Remy Green, the creators of the financial literacy brand and podcast FYI FLI, (For Your Information: Financial Literacy and Investing). This information-packed episode provides listeners with actionable financial advice, defines key financial terminology and addresses tough questions faced by emerging professionals, such as whether to rent or buy homes and how to start saving for retirement.
Listen to FYI FLI on your preferred podcast platform.
Subscribe to Career Compass on Apple Podcasts, Google Play, Spotify, Stitcher or wherever you listen to podcasts. Check out SHRM.org/podcasts to listen to all of our episodes and also hear more podcasts from SHRM. And, be sure to rate and review the show on Apple Podcasts or your podcatcher of choice.
Keep up with SHRM online and follow us on Facebook, LinkedIn, Twitter and Instagram.
Kevin Abbed:
Welcome back to Career Compass, a podcast from SHRM, the Society for Human Resource Management and the SHRM Foundation. Career Compass prepares the future leaders today for better workplaces tomorrow.
Kristy Parola:
As the voice of all things work, SHRM supports students and emerging professionals with advice, information, and resources for every step of your career.
Kevin Abbed:
Designed for the student or emerging professional, Career Compass delivers timely, relevant, and critical conversations about work to help you succeed in your career journey. Thank you for joining us for this episode. My name's Kevin Abbed.
Kristy Parola:
And my name is Kristy Parola. And today we will discuss how students, emerging professionals or really anyone can become more financially aware. We're going to discuss terms like IRA or inflation as well as important financial decisions new professionals are facing, like whether to buy or rent a home. To help tackle this topic, we will be joined by Hassan Thomas and Remy Green. They are the creators and business partners of the financial literacy brand and podcast FYI FLI, which stands for, For Your Information Financial Literacy and Investing.
Kevin Abbed:
With that being said, let's get started. So Kristy, I know both of us are looking at housing options right now. I'm probably leaning towards renting an apartment or condo while you're a little closer to buying your own home. Can you tell me what surprised you the most when you started the whole home purchasing process?
Kristy Parola:
Yeah. Pretty much everything. You can't, as much as people have to give advice and help you out, I think there's so many different ways and avenues that you can go about this process, that it really can get confusing really quick. But then at the end of the day, I've been trying to buy a house for the last six months through the craziest, I think, time in years to buy a home. And we ended up just renting for now and probably we'll try again in a little while. So it's definitely been just nuts. So what about you, Kevin, when you were in school or even after you started working, were you paying attention to finances and spending?
Kevin Abbed:
Yeah. Growing up, my family always taught me, it's super important to save your money. My grandparents would give us Christmas gifts and we weren't allowed to spend anything. So it would just be saving money and it's become an important part of my life, just managing my money and making sure there's no reckless spending or nothing too crazy going on. So I'm super excited for today's conversation because I think even still I have a long way to go and I think I can gain a lot from talking with our speakers today.
Kristy Parola:
Yeah. Let's get any help that we can get.
Kevin Abbed:
Yeah. So let's just jump right in. Hassan was a full-time student athlete at Maryville College in Tennessee and after interning at Global Trade Associations, he made the monumental decision to blaze his own career path and launch an enterprise of viable, financial tech driven projects designed to positively impact the market. As such, Hassan created FYI FLI, For Your Information, Financial Literacy and Investing, a brand that aims to promote financial literacy while eliminating financial illiteracy, and teaching millennials how to manage and grow their money through its financial literacy app websites and other resources.
Kristy Parola:
We are also joined by Hassan's business partner and cohost of the FYI FLI podcast, Remy Green, who is the present of the senior class and finishing up at Maryville College. Gentlemen, welcome to the show.
Hassan Thomas:
Thank you. Thank you. Thank you for having us.
Remy Green:
Pleasure to be here.
Kristy Parola:
Absolutely.
Kevin Abbed:
I'll start us off guys. As fellow podcasters, how'd you get into the whole broadcasting space and how's it going for you guys so far?
Hassan Thomas:
It's actually a funny story. I had a mentor in Tennessee named Chris and he told me I should start a podcast, and this was actually before I came up with the idea for my app and website. So when he told me that I was like, I don't think I want to start a podcast. I don't really have anything to talk about. But after I came up with my idea for FYI FLI, which stands for Four Your Information, Financial Literacy and Investing, I thought starting a podcast would be a great way to really insert myself into the financial literacy community. And it's really proved to be a great way to just build community, build with like-minded individuals that have one common goal of building generational wealth. So it’s really proved to be a great way to integrate myself into this community. And since me and Remy started last year, we had our first episode, August 28th. And since then, we've actually accumulated over 6,000 downloads and we're being listened to in 30 plus countries. So I would say it's going pretty good, so far. What do you think, Remy?
Remy Green:
It's been a grind, but most definitely fun to say the least. In our first season, we went crazy. Literally before the first episode actually dropped, we had recorded like what, seven episodes? Which was a little over a quarter of the first season. It's just all about staying consistent. We got into a routine of recording every Sunday and that's been our little formula for success. It's definitely been smooth being co-hosts with Hassan. I couldn't have asked for a better business partner.
Kevin Abbed:
Yeah. You can already tell with the back and forth with you guys. Why was the topic of financial literacy so important to you guys and beyond that? You got into it a little bit, but could you just delve in like, why the focus on millennials?
Remy Green:
Because literally, financial literacy is relevant to everybody of all ages. You're never too young to learn about money, but not only that, financial literacy is a huge issue for everybody since over what, 689 million people live in poverty as we speak, we're just trying to help break this cycle of generational poverty. And we recognize it starts with the youth.
Hassan Thomas:
Also, who doesn't like to talk about money? Financial literacy can be thought of as an intimidating word sometimes, but it's truly just being educated on money and how to grow it effectively and efficiently. Everyone wants to live a certain lifestyle, but that lifestyle costs money. So we have to educate ourselves to be in the position we pitch ourselves in, in the future.
Kristy Parola:
So I'm going to dive into some statistics here, according to the National Endowment for Financial Education, only 24% of millennials demonstrate basic financial literacy. When do you think the disconnect is happening? Is it happening when you're younger? Is it happening while you're in college, or is it, you're just never really receiving that education and why aren't more young people informed?
Hassan Thomas:
Well, I definitely think the disconnect comes from the lack of relatable information and I honestly believe that's what makes FYI FLI so special because we deliver our financial content in a way that's fun, relatable, and digestible for our audience. And also it's just simply not being taught to us. As of now, there's no state in the US that mandates a personal finance class in high school. So it's really clear to me that personal finance is not being taught. Remy and I both went to high school in Texas, and what do we have, one week of financial literacy class in economics?
Remy Green:
Man, it was something like that. They definitely didn't put the emphasis on how important that stuff was, because if they did, there would be a lot more financially literate people. Personally, I feel like the same emphasis they put on reading in math, need to be put on financial education. I guarantee you if they did that, we would see major changes in some of these negative financial literacy statistics Like the one you mentioned, Kristy.
Kristy Parola:
Yeah. I remember, I think the last time I learned anything other than just how to account money was how to write a checkbook. And that was in sixth grade and they taught you to balance and this is where your signature goes. This is how you write out like $125. But that was the last thing I could remember. And I think too, and I'd love to get your take on this, I think the goals of people are different. I have a cousin who lives in New York city. She doesn't have a plan to buy a car or buy a house and I live in a different area where there's different goals for me. So you have to personalize what you are aiming for. So how do you try to explain to people who have different financial goals, how to attain them?
Hassan Thomas:
Definitely. That's a great question. And I think the main way you can do that is just by identifying your priorities and then from identifying your priorities, finding the perfect balance between your wants and your needs. Of course, it's not going to be perfect, but trying to really distinguish the difference between your wants and your needs and really having that balance can be a great way for you to understand what's your goals, and just basically having a plan, because if you don't have a plan, you know what they say, if you fail to plan, then you plan to fail. So I just think it's very important to have a plan and then provide balance by basing that off your priorities.
Kristy Parola:
Sure. So in your mind, leading off that, what does it mean for a person to be financially literate and why is it especially important for students and emerging professionals to master this craft?
Hassan Thomas:
So to be financially literate is actually to be able to understand not only how to budget your money, but being able to save and grow your money effectively and efficiently. Financial literacy honestly covers everything from saving, budgeting, investing, student debt, taxes, insurance. So basically if you deal with money, which is everyone, you need to be financially literate, period.
Remy Green:
Facts, and to answer your second question, it's imperative for students and emerging professionals to be financially literate because it'll allow them to live a lifestyle of their dreams while decreasing the likelihood of making poor financial decisions. And that just sounds good to me.
Kristy Parola:
Yeah.
Kevin Abbed:
Yeah. I couldn't agree more. I actually saw a crazy statistic the other day where it was something like the majority of people ages 25 to 30, I think it was, have negative savings. They just don't have any money, whether that be just mismanaging their money or there's so many other ways, but I just thought that was such an insane statistic to think about. My next question, what are some potential consequences for being financially unaware? And do you have any interesting stories to share about people who could have used a bit more education on the topic?
Hassan Thomas:
So I think some consequences of being financially unaware, financially illiterate are the poor decisions that you can actually make from not being financially educated. These poor decisions can take months, even years to recover from having bad credit, falling victim to heavy debt, and these type of things will prevent you from accomplishing life goals, like getting a new house, getting a new car, getting married and different things that we all want to accomplish.
Remy Green:
But it's even more than just physical things you can buy. Being financially literate can affect your mental health in a major way. 42% of the people claim that money problems stressed them out more than a job or a bad relationship.
Kristy Parola:
Yep. I think you guys are hitting on a lot of important notes here and I think as well as knowing the general information, I think it's hard for a lot of people to understand what a lot of this even means because they don't know what the basic terms are. I know if it wasn't for my HR department explaining to me what a 401(k) is, I would have no idea. So I do have a couple of terms that I'd love to ask you guys to generalize and go over and what information people should know generally about these things. So as I mentioned, let's start off, what's the difference and what is a 401(k) versus a 403(b)?
Hassan Thomas:
Definitely. Definitely. These are all great questions because these are things that aren't taught to us. And I remember when I had my first job at Kroger when I think I was about 14 or 15, and I had just seen these numbers 401(k), and I'm like, what is this? I don't know what it is, so I'm going to just stay away from it, of course. But that relates to the lack of education in our communities. So if we don't know something, we're going to fear it. So basically what a 401(k) is, is an employer sponsored retirement program. So what you can do with this 401k and it's really great if your employer actually matches that money that you put in. So if you put in money into this retirement program that is from your employer, sometimes they will actually match what you put in. So this is actually a very great way to start and begin investing because it's sponsored by your employee and it will also let your money grow tax free.
Kristy Parola:
And there's generally little that you have to do with it. Right? You just set it up and let it run its course or do you have to manage it?
Hassan Thomas:
Yeah. So the company actually manages it, but it's definitely important for you to understand what you're investing in and where your money is being allocated, because that's honestly the first rule of financial literacy is just understanding your finances. And Rem, did you want to talk about the 403?
Remy Green:
A 403 is the same as a 401(k), but it's for nonprofit employees like teachers and other occupations like that.
Kristy Parola:
Well, thank you so much. And another item that haunts me and I still cannot necessarily get it straight is what is a mutual fund? What the heck is that?
Hassan Thomas:
Definitely, definitely. So mutual funds are actively managed funds that allow you to invest into multiple stocks instead of one, providing you with that instant diversification, which we all need when we're investing. But they are a little more expensive than ETFs, which are exchange traded funds. So to explain an ETF, simply it allows you to invest into a group of stocks that track a certain sector or industry like technology companies, financial companies, and many more. I'm more of an ETF guy. I like to invest into them because like I said, they're passively managed. I don't have to manage them every day. I don't have to pay. And that's why mutual funds are more expensive than ETFs because you have to pay somebody else, you have to pay for those management fees.
With ETFs, like the two ETFs I'm invested in, one is called VTI, which is the Vanguard Total Market Index. This ETF allows you to invest into every single, publicly traded company in the US. So that's huge. And the other ETF I'm invested in is called BX US, and this ETF allows you to invest into every single company outside of the US. So with two moves, you're literally invested into every company in the world. So this is why just investing and having this education can take you so many different places.
Kevin Abbed:
I'm going to have to write those down.
Hassan Thomas:
Definitely.
Kevin Abbed:
That just sounds too good to be true.
Hassan Thomas:
And that's exactly what I thought. I was like, so really these two ETFs will allow me to do that and I researched it. I had to call like three of my mentors just to make sure, is this... Like you said, this sounds too good to be true.
Kevin Abbed:
Oh yeah. For sure. One of the things that I struggle with when it comes to financial literacy can be understanding compounding interest. Could you guys jump a little bit into that?
Remy Green:
So compounding interest, it's simple. It's the interest you earn on both your original deposit and on the interest that your money earns. Compound interest allows your savings to grow faster over time. It's when your money makes money for you in simplicity. You want to add to that [San 00:15:36].
Hassan Thomas:
So compounding interest is basically the reason why we need to be investing early and often. To put it in terms of the way people can understand it, it's basically like, you know how when you have a group of people and you feel more big and bad and you feel more confident, that's basically like the same thing with your money. So if you're investing more money, if you're investing earlier and often, your money feels big and bad, and now they're going to be working faster and working harder for you. So that's how you can think of your money working for you.
Kristy Parola:
Explain a little bit more the difference between like your traditional, I don't want to say regular, but your traditional interest and the compounding interest, because I know I'm getting a little fuzzy on the two.
Hassan Thomas:
Definitely. Definitely. So this regular interest or, like you said, traditional interest, is just the money that is added onto money that you are saving or money that you are borrowing. If you're a saver, high interest rates are good. It means you're earning more interest on your savings. Now, if you're a borrower, higher interest rates are bad. It means it will cost you way more to borrow that money. So that's how you can think of interest because interest can work for you or it can work against you. So it's just important to know your, like I said, know your financial situation and know your goals.
Kristy Parola:
So what would you say is considered a good interest rate?
Hassan Thomas:
It honestly just depends on what you're referring to. So if we were talking about a credit card, some interest rates go from 14% APR to 22% APR, which is really bad, and that APR is basically the amount of interest that is going to be applied to your principal loan throughout the year. So it is, like I said, it just really depends on what we're talking about because we could be talking about interest rates for a car loan. We could be talking about interest rates for a mortgage loan. So it all depends. But if we're talking about loans, the lower the interest rate, the better. Now, if we're talking about saving, the higher interest rates, the better.
Kristy Parola:
So, we've heard a lot about how COVID has really impacted the housing market interest rates for many things across the board. To summarize some of the big things like homes, home and auto loans and even your school loans, like what is the craziness that's going on about it, and why is everybody going nuts over these interest rates?
Hassan Thomas:
Because as of now, they are really the lowest they've ever been. So it's just due to many things from COVID and just the economy really trying to bounce back. And it comes back to being financially educated. If you're not financially educated in times like this, you would think, oh man, it's not a good time to buy, everything is going down, it's time to sell, it's time to sell. But with proper financial education, you would know if things are down, that's when it's time to buy. So you can get it at a lower price because it's about buying low and selling high.
So that's where just being financially educated is so important, because it will allow you to, like I said a little early, just live the lifestyle of your dreams and it'll decrease that likelihood of you making that poor financial decision and selling when everything is low is a bad decision. We need to be buying when everything is low. And then when the economy and the market comes back, then we can sell when we bought it at that low price to get that profit.
Kristy Parola:
So going into student loans a little bit, would you say... I hear the term refinancing your student loans, if the interest rates are so low. Is that something that students and emerging professionals should consider?
Hassan Thomas:
Definitely. Definitely. They did cancel the interest rate on student loans until September of 2021, I believe. So it would be definitely be smart to pay down on those student loans now while we have this opportunity, because I can guarantee you, I hopefully it'll never be back. We'll never have to go through a situation like this again. But it's definitely important to take advantage of maybe refinancing while the interest rates are so low and paying down on your student loans right now, because as I said, our new president has canceled the interest rates on our student loans until September, I believe.
So if you're listening to this, definitely take advantage of just put some extra money. And it's about not spending all of your money on debt and paying off debt, but just start putting small, incremental payments to this large amount, and those small incremental payments will turn out to have a huge impact on your debt repayment. So, definitely do that while we have the opportunity and take advantage of that.
Kevin Abbed:
Yeah, Kristy, that's a great question, like a lot of people are refinancing their mortgages right now. I know that's a huge thing. I hear my parents talking about people doing... friends of theirs doing this all the time. Yeah, with interest rates being so low, the housing market, like you guys said, is booming right now. And I want to know and for our listeners to know, at our age, I know like I'm 20, I'm 24 years old, and I'm looking to get a place. What do you think's better right now, renting or buying?
Remy Green:
I can answer that one for you. It just depends on your situation. From a financial literacy standpoint, to turn the home into an asset, it needs to be making money for you. One of the biggest misconceptions is that your home is an asset, when it comes to the definition of an asset and a liability, an asset is something that makes you money and a liability is something that takes away from your finances. So your home is considered a liability. Now, if you wanted to purchase a multi-unit home and turn into a rental property, that brings in income that would be an asset. So again, it all depends on your situation. If you're young and know you're not settled in, then renting may be the best option.
Kristy Parola:
So, what are your thoughts. We're going to transition out of... We've been talking a lot about loans and mortgage rates, but then there's the latter half of our life where we're thinking about retirement, life insurance. So what are your thoughts on purchasing life insurance, especially as someone who is a young professional, a student, and you're thinking that far down the road, it's nothing that's on your mind right now?
Hassan Thomas:
Notice how you said later down on in our lives, and a lot of people aren't thinking about this right now. But with whole life insurance, it's something that we need to be looking at right now. And I've always thought that life insurance was something you needed when you're older, when you're settled down with three kids that you have, have all of them to take care of, and it's definitely some of that. But with whole life insurance, it's a different game. This is actually how people build generational wealth. So I'm actually getting whole life insurance as we speak. With this whole life insurance, it comes with a cash value savings account, which was totally new to me.
I've never heard of that. And with this account, when you pay your monthly premium. So monthly premiums are your payments. When you pay your monthly payments or premiums, it is split between your death benefit, which is to cover your family and everything of course, and it's split with your cash value savings account. So this cash value savings account allows you to gain a annual percentage on your money. So usually life insurance would give you about a 4% guarantee yield on your money. So your money was growing at 4%. Do you guys know anywhere else your money can grow 4% guaranteed?
Kristy Parola:
No.
Hassan Thomas:
Exactly. So that was just huge to me. And what they do is they allocate that 4% and then the rest of your money is actually put into the stock market. So of course we know the stock market over the last 100 years has averaged a seven to 10% return on your money. So you're gaining a 4% guaranteed and then a possible seven to 10% return on your money from investing into whole life insurance. And even whole life insurance, another great thing about whole life insurance is this type of insurance you can actually borrow from this whole life insurance as you're borrowing from the bank.
So just like how you borrow from the bank, you can borrow from this whole life insurance. But instead of actually paying back the bank, you actually pay yourself back because it's using the death benefit that you have as collateral. Does that make sense?
Kristy Parola:
Yeah. [inaudible 00:24:25] that was actually a great explanation. Thank you.
Hassan Thomas:
Okay, great, great, great. So, whole life insurance, for me personally, seems like the way to go because it's not just for, okay, I have a whole family, I need to protect them as well. It's protecting yourself as well by allowing you to save money at a higher yield and get a higher return on your money, because we like to talk about on FYI FLI, we like to talk about high yield savings accounts and Roth IRAs and different things like that. But a high yield savings account only offers a 0.5 return on your money. So with this life insurance, getting a guaranteed 4% on your money is just too much to pass up. But did you want to touch on that term life insurance, Remy?
Remy Green:
Yes, sir. So term life insurance guarantees payment over stated death benefit to the insured beneficiaries, if the insured person dies during a specific term. So if you die within that set amount of time, your loved ones will be taken care of. Personally, I'm not too fond of this because we're all about living, not surviving over here on the FYI FLI side of life.
Hassan Thomas:
Facts. Facts.
Kristy Parola:
So how much life insurance should I have? Is it like, at a point is it too much? Am I over preparing? Am I not getting enough? Is there a magic number?
Hassan Thomas:
So I think it's just more important to be aware of your financial situation, because if you're talking about whole life, whole life insurance is way more expensive than term life. And you just have to see what you can comfortably do because you don't want to go broke just paying for life insurance or any type of insurance like that. So it's just important about knowing which one, and like I said, that's one of the pros and cons of whole life insurance. With whole life insurance, you're actually building an asset. You're building an asset. With term life insurance, it’s actually used as a liability because you're just paying that money. And then after your term is over, so with the term life, you have a 10 year term, 15 year term, 20 year term, a 30 year term.
So after that term is over, then all that money that you were paying throughout the years, that just goes straight to the insurance companies. With whole life, you're paying that, you're paying that, and then you have that savings account that's building while that death benefit is building. So just to really answer your question, there's no set magic number, but just being aware of your finances, being aware of your family situation, because ultimately life insurance is going to be protecting and securing and making sure, just in case anything happens to you, that your family is protected. So just base it off, as I said a little earlier, just your priorities. If you have three kids, you may need more than just 500,000. You may need $1 million in life insurance. So just being aware of your financial situation.
Kevin Abbed:
I'm not going to lie to you guys, I knew absolutely nothing about life insurance. When I tell you nothing, I literally mean nothing. You hear life insurance and it's like, ah, yeah, yeah, whatever, whatever.
Hassan Thomas:
Definitely. I definitely recommend that whole life insurance. Like I said, it allows you to take advantage of compounding interest like we talked about a little earlier because it has that cash value savers account. Once I heard a cash value savers account, I was like, oh yeah, I'm in.
Kevin Abbed:
Oh yeah. You had me on cash. No, but y'all are starting to fill up my notebook here with all the financial advice. Along the lines of life insurance and all these big scary things that we didn't really learn about in high school and college, retirement, what do students and emerging professionals need to know now to start preparing for the future?
Hassan Thomas:
So I'll say we need to know that we have time on our side. By saving and investing early and often, we can take advantage of that compounded interest that I mentioned. And just literally by saving $200 a month for the rest of your life, you can guarantee yourself to be a millionaire.
Kristy Parola:
Is that the magic number that you need to retire?
Hassan Thomas:
It may be. It may be. I definitely think $200 is a good starting place for anybody, just putting away $50 a week, but it doesn't have to be a magic number. It's just as long as you're doing something. We need to be doing something, we need to be starting now, whether it's $10, $15 a week, just start now. And like I said, those small incremental habits will lead to a big and positive gain in your financial future.
Remy Green:
Another good way to save money is automation. By automating your payments, you'll never have to remember to set money aside because it's done for you automatically, which will create a positive habit that will change your life in the long run.
Kevin Abbed:
Yeah. That's a great point you made. I've actually started using the app Acorn where money that goes to the account weekly, but I know normally it takes purchases you made on your debit card or credit card and it rounds it up to the next whole number and it takes that change and it invests it into your Acorn account. So that's just something that I've started doing. And I don't even notice it. It automatically leaves my account every week. It's something I don't have to worry about. And I forgot I literally had the app for a couple months and then I looked in it and I was like, wait a second, this is [inaudible 00:30:00]. There was just money there that I had no idea it existed.
Hassan Thomas:
Yeah. Just speaking on that Acorn account, that's something that we actually put into our FY Fly app that will be coming soon, is a save while you spend feature. So say you made a purchase at Starbucks for $1.75, I know it's never that cheap, but say you did that. Our app would actually round that up to the $2. So what Acorn actually does is put your money into an ETF and transfer that into an ETF. So we don't have an ETF currently just yet, we'll definitely get there in some time, but what we decided to do, we decided to round up that savings and put your money from your checkings account into your savings account. So I definitely like that automated savings, just like you said with the example that you gave, you forgot you had it and came back and checked that you had a lot of money in there. So that's the same thing that we would like to do on our app because we believe that automated savings and automated investing is the best way to go.
Kristy Parola:
This is probably the only thing that I've actually done proactively that you guys haven't mentioned and I've been prepared and do it on my own, and that's not a new concept. And I think it's so helpful. I have a separate savings account for my checking and I set up my direct deposit at work. So I have automatically like 200, $300 each paycheck go in there and I never touch it. And the big thing that, this is what my dad's always told me, is if you do it before you get your actual paycheck in your account, you go to spend it, you'll never realize it's gone.
Hassan Thomas:
Definitely.
Kristy Parola:
And you get used to living off of that. So that is something that I definitely would recommend if you can do Acorn or you can do this if you want to be able to have more of a consistent amount. But I was actually really excited because I was like, oh, I actually, this is the one thing I do do that you guys have talked about. So yeah, this is awesome. This has been great guys.
Hassan Thomas:
Thank you.
Remy Green:
Thank you.
Kevin Abbed:
You guys were just actually referencing your app and could you go a little bit more into detail on just your app itself, its functionality, some more of its features?
Hassan Thomas:
Sure. So our FYI FLI app will act as a financial literacy hub and you'll be able to budget your money, save your money, grow your money, and actually eliminate debt with our debt eliminator. We have budgeting tools on there and it will be so many different things that you can do on this app. We're actually going to be linked with some affiliated companies where you can go check out what they have. And it's just going to be, like I said, a financial literacy hub where you can learn how to do many things. And we're also working on getting our online curriculum into high schools and colleges. And one of our main goals is to mandate a personal finance class in every high school and college in the nation. So it is definitely a large goal, but I think we are the guys to tackle that goal. We've never backed down from a challenge.
Kevin Abbed:
Yeah, that's awesome. That's a huge thing I think, even I wish I would've known a little bit more about personal finance growing up. So the fact that you guys are trying to get those classes into the younger generation is amazing. So props to you guys for doing that.
Remy Green:
Thank you so much.
Hassan Thomas:
I appreciate it. I appreciate it.
Kevin Abbed:
So just to close out, we've talked about a lot today, learned a ton, but just before you guys go, what's one piece of advice you would give to a student or emerging professional when it comes to financial literacy in general?
Hassan Thomas:
So my best piece of advice would be to find your balance. I'm real huge on balance. We have to find the balance between our mental, physical and fiscal health, not only those things, but we have to find that balance between our education and entertainment. We're all spending all day watching Netflix and on social media, we have to start replacing some of those things with audiobooks, eBooks, podcasts and other different things like that because, so once we graduate high school or college, no one is forcing us to learn anymore. So it's up to us to continue our self education. And honestly, why wouldn't you want to be educated on money? Everything we do in our lives requires money. It honestly makes the world go round. So don't you think we need to be educated on something this impactful?
Remy Green:
My best piece of advice is that it's never too late to learn about financial literacy. People get to thinking that because they're at a certain age or point in their life where it's too late. So they get complacent with their way of living, not knowing that literally if they started saving or investing that day, they would be a step closer to being financially secure.
Hassan Thomas:
And one thing that I wanted to add, on FYI FLI, we always like to leave with some action items, some action steps. So I think some good action steps for anybody listening now is to start a high yield savings account. We don't save our money in regular savings accounts anymore because they give us a return on our money of 0.004, and 0% of anything is always going to be zero. So make sure that we're going out there and looking for higher yielding opportunities, like a high yield savings account right now, I bank with Chime and I use their high yield savings account. So definitely look into a high yield savings account and start a Roth IRA. I'll quickly explain that for everybody listening, a Roth IRA stands for an Individual Retirement Account. So a Roth IRA is the opposite of a traditional IRA.
As in you pay your taxes on the money that you invest in the beginning, and then all that money that you're investing grows tax free. So if you believe that taxes will be more when we get older than a Roth IRA is for you. So it is very important that we are allowing our money to grow tax free because as financially literate people, we want to keep as much money in our pockets as possible. So action items, look into a high yield savings account and look into a Roth IRA and make sure we have our emergency savings funds.
Kristy Parola:
How much money do you think is good to have in an emergency savings fund?
Hassan Thomas:
So normally it's always been three to six months of your expenses in emergency fund. But I think from what COVID has taught us, having three to six months of your emergency fund is just not going to cut it. Have we been in this COVID for, what about a year now? A year and a month? So I think now it's important that we adapt, it's all about being adaptable and being able to evolve. So we now need to have six to 12 months of our expenses in emergency fund. And that's what I believe just from what we've experienced, what we've all experienced throughout this last year.
Kevin Abbed:
Yeah. I know. I, for one just started a Roth IRA account last year. That's one of the things my parents were super adamant about getting involved with. So I couldn't agree more and I'll echo that. Actually, I have one last, last question. What are some of your guys just favorite financial resources that you're using right now?
Hassan Thomas:
I listen to a lot of podcasts. I've really dived into a lot of different podcasts. Gary V's podcast. It is not too financial, but it is more of an entrepreneurial podcast. I listen to that a lot. Black Wealth Renaissance, bigger pockets, money podcast, snacks daily from the Robin Hood podcast, a lot of different podcasts I like to just educate myself on. So I think those would be, and how I talked about it a little earlier, just balancing that education and entertainment intake is really important.
Kevin Abbed:
Yeah. And last, do you guys want to plug your socials or where can people find you?
Hassan Thomas:
Definitely, definitely. So you can check us out on all social medias at FYI FLI, and that's F-Y-I F-L-I, and you can also tune into our podcast that's available on all streaming platforms. We actually release episodes every Friday and we're very excited about this season two coming up. So just tap in with us and check us out. Like I said, we have episodes every Friday, so stay tuned and lock in.
Remy Green:
Stay tuned.
Kevin Abbed:
Hey guys. So yeah, just thank you so much for coming in and joining us and providing all sorts of good financial tips. I definitely learned a lot. There's definitely a lot. I need to go home and research life insurance and got some stuff to figure out.
Kristy Parola:
Yeah, I can't thank you guys enough. You've given a lot for us to think about, and I think a lot of students and emerging professionals to think about. So thank you so so much.
Hassan Thomas:
Thank you for having us on your platform. We really appreciate it.
Remy Green:
We really do.
Kristy Parola:
So with that, I'm going to take my giant notebook, highlighter and pen, and we're going to bring this episode of Career Compass to a close. We'd like to thank SHRM and SHRM Foundation for providing us with this platform. But most importantly, we'd like to thank you all for joining us and help you stay with us throughout the season as we discuss more topics like this episode.
Kevin Abbed:
For more exclusive content, resources and tools to help you succeed in your career, consider joining SHRM as a student member. You can visit us at shrm.org/students to learn more about being a part of a community of over 300,000 HR and business leaders who impact the lives of over 115 million employees worldwide.
Kristy Parola:
If you like what you heard, we'd love your subscription. You can find us an Apple podcast, Spotify, Stitcher, Google play, wherever else you listen to your podcasts. And do you have a topic you think we should cover or a guest we should hear from? We'd love to hear it. Email us at careercompasspodcast@shrm.org.
Kevin Abbed:
Lastly, are you looking for more work and career related podcasts? Check out All Things Work and Honest HR at shrm.org\podcast. Thank you again for listening and we'll catch you on the next episode of Career Compass.