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Financial Planning for the Rest of Us

April is financial literacy month. So I was happy to read in an email that TD Ameritrade is doing its part and offering free educational webcasts. But rather than teach something useful like how to save for retirement, the bank is focusing its series on sophisticated -- read risky -- trading strategies. Haven't we all learned by now that day-trading should be left to the pros and the rest of us should focus on more basic financial planning.

Perhaps it isn't fair of me to make an example of TD Ameritrade. There are plenty of other banks that aren't teaching consumers to be conservative savers and to live within their means. Most of the seminars I've seen are simply designed to push costly products.

Just in case any financial institutions are reading this, here's what I think your marketing folks should be focusing their outreach on:

1. Budgeting
I know it sounds basic, but most families could use some help developing and sticking to a budget. Sure, there are plenty of financial websites that offer free worksheets and calculators, but most of us need some guidelines on how much money to allocate toward important needs like housings and retirement.

2. Building an Emergency Fund
It used to be that financial planners recommended families bank three months of savings just in case something goes wrong. Thanks to a weak job market, some experts are now revising that figure to something closer to six months. Unfortunately, too many families missed the memo and the American savings rate remains too low.

3. Saving for Retirement
Everyone knows they should save for retirement, but few people realize just how much money they'll need during their golden years. It isn't until we're just a few years away from receiving our gold watches that we figure out we're in serious danger of outliving our savings. Educate folks in their 20s, 30s and 40s and we'll actually have a chance to properly provide for ourselves.

4. Setting Short Term Goals
If there was one lesson that came out of the housing crisis it was that Americans have forgotten how to save for short-term goals like buying a home. In fact, coming up with the traditional 20% down payment seemed quaint and old fashioned when bank were practically giving money away. Now that financial institutions are once again requiring buyers to have some equity in their properties, banks should also help educate consumers on how much house they can conservatively afford.

5. Saving for College
Yes, I put saving for the kids' education last. That's because children can borrow for college if they have to. Having said that, if there's enough money left over after saving for retirement and other goals, it's helpful to educate parents on the importance of planning for this massive expense. And if we families are going to set aside the dollars, there are some great tax-advantaged vehicles, including a 529 college savings account, that people need to know about.

Is your bank helping consumers learn how to manage their finances? If so, I'd love to hear what it's doing and if you find it helpful.

Piggy Savings Bank image by Alancleaver2000, CC 2.0.

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