Are you properly feeding your pig?                            

After reading the title of my column, you may have thought that you accidently received this month’s issue of Farmer’s Digest. The title actually relates to our CPA profession’s financial literacy initiative and is in reference to the mascot of this campaign—Benjamin Bankes.                                                                                

The Financial Literacy Campaign has been in existence since 2004 and has touched millions of people throughout the country, including Arizona, through various media (including some very impressive award-winning Public Service Announcements), visits to the 360 Degrees of Financial Literacy Web site and through public speaking engagements. 

While touching millions seems like a big number, I am not sure we have done enough. The sub-prime disaster, sluggish economy, skyrocketing fuel costs and increased unemployment rates have led to record bankruptcy filings, which indicates that many may still not be receiving the message.

This crisis is impacting our employees, as many of them purchased homes with little or no equity. This scenario obviously puts them at risk with recent market drops, and also requires them to pay costly mortgage protection insurance. In addition, many took out mortgages that had low introductory rates, only to see their mortgage payments significantly increase. Please keep in mind that many of the people about whom I am talking have accounting degrees and some even have CPA initials after their name. 

The young adults in this country also may not be receiving the message. My oldest son, 23, had been dating a young lady and recently incurred a large (some would say astronomical) phone bill due to a rather significant amount of long distance calls between them.  Let’s just say that this phone bill covered more minutes than my wife and I talk in a year, and we could have had a nice poker game with all of the Ben Franklins used to pay the bill. (I know this may sound similar to another column from my predecessor, Layne Simmons, about a large cell phone bill.) 

The “Bank of Dad” took care of this payment, as well as many others over the years. The phrase “having kids on the payroll” has taken on a whole new meaning at the Goldenson house over the past few years. Fortunately my other son, 21, is not as talkative on the phone, but has had other financial needs over the years. I have no recollection of my parents ever helping me like this during my early adult life, but I am sure that their memory of “feeding the pig” for me would be different.  I at least know that I never had a large cell phone bill, but that was probably because cell phones may not have been invented when I was in my early 20s.    

I am proud of my two boys and what they have accomplished, especially when I consider that the world is a much more difficult place to live in than it was when I grew up.  I also enjoy the fact that they are strong young men that can help with the heavy lifting around the house. I feel, however, like I have not adequately done my job teaching them about finances and how to “feed the pig” when they ask what FICA is and if they really need to pay this out of their paychecks. They fortunately (or unfortunately, depending on your view) have not had to pay income taxes because of low earnings while they are in school.  I am not sure how I will explain the IRS tax code to them when they make it big in the real world.

I worry about how my kids, along with many others, will make it in today’s complex environment that at times makes it too easy to obtain quick money and make bad financial decisions. Fortunately, we all have the financial literacy resources available to use to continue to educate and guide those in need. 

Ben Franklin said many years ago that “a penny saved is a penny earned.” While a penny may not go very far today, we all need to be “feeding our pig,” no matter how small we start. Abraham Lincoln’s statement, “You cannot escape the responsibility of tomorrow by evading it today,” is also very much on point. I ask that you contact the Society office to see what you can do to spread the word about financial literacy so the pigs of tomorrow are being properly fed today.

AZ CPA – October 2008