Financial plan boosts more than bottom line, it can be GPS to happiness

SAN DIEGO — A marr i a ge destroyed bec ause a husband paid for a pool in the backyard, nice cars and frequent dinners at restaurants — money he should have been squirreling away for his son’s college tuition.

Young people who are broke but who will put thousands of dollars in tattoo purchases on credit cards.

Parents who dip into their retirement funds to pay for a daughter’s wedding.

Jim Chilton offffffffffffers those sto- ries as examples of fifinancial illiteracy. He’s the CEO of The Society for Financial Awareness, a nonprofifit he founded in 1993 and based in San Diego.

The group’s members, who include estate-planning attorneys, fifinancial advisers and CPAs, give free fifinance seminars at clubs, churches and companies. April is Financial Literacy Month. Through

Chilton i s tr ying to spread the word that knowing how to manage money is critical to health and happiness. Chilton chats about fifinancial illiteracy and how to solve the problem: How do you defifine fifinancial illiteracy?

Unfamiliarity with the principles of cash management, finances. Ignorant doesn’t mean stupid. It just means most people have not been put in an environment to learn.

People spend fifirst, consider second, whether they need it or not. For example, they say: “Honey, wouldn’t that be nice in our bedroom, kitchen or living room?” The (partner) should say: It would, but is it necessary?” Instead if we don’t have the money, we fall back on credit cards. It’s behavior. It’s bewildering to me that schools across the nation don’t have fifinancial literacy as a core subject.

I n wh a t g r a d e s h o u l d schools start?

Fifth and sixth grade. If your mom gives you an allowance, think about short- and longterm spending. Want a bicycle? The goal is to save up to $100. Mom and dad will put in $200. That’s long-term planning. Every time I get an allowance, am I going to follow the plan or spend that money with my girlfriend at the mall?

Then in high school, they can learn about car loans. In high school, it should be mandatory.

Before fififth and sixth grade, should parents be teaching their kids about fifinancial literacy?

Yes. We taught our kids with questions. What do they want their money for? We always implemented long-term planning.

You’ve mentioned that only 3 of every 100 Americans have a written financial plan. Why is it important to have one?

Like a GPS or North Star, a written fifinancial plan helps them stay on track. The No. 1 cause of divorce is over money issues. There are mistakes constantly made by couples. Also, student loans have exceeded car debt and credit-card debt combined.

And then there’s stress. Our well-being can also crumble because of a staggering amount of debt that constricts us and sucks out our joy.

Why don’t more folks budget or plan fifinancially?

They are already in the ditch. It’s embarrassing.