Daad Rizk grew up in a working family in Beirut, instilling in her that education is the way out of poverty and into financial security.
Rizk, Penn State’s financial literacy manager, said the housing collapse of 2008 awoke the United States to acknowledge its lack of financial literacy and into finding solutions to combat it.
She has 20 years of experience in higher education financial literacy, the ability to make informed decisions in money management.
“Financial literacy is more than a job to me,” Rizk said. “It is my passion and my mission in helping students and the community.”
Rizk will hold a workshop from 5:30 to 6:30 p.m. Wednesday at the University Libraries in the Foster Auditorium. The workshop is free and open to the public, but registration is requested. Go to portal.outreach.psu.edu, and under “search,” type the keywords “financial literacy.”
Q: Why should people have their personal and financial information organized?
A: To organize is to structure and manage things to reach a particular goal, to put things in an orderly fashion that helps simplify one’s life, reduce stress, eliminate clutter, but most important is to keep tabs on one’s finances by streamlining money management to avoid paying additional fees, interest charges and investment losses.
Q: Let’s say our situation includes a desk and cabinets cluttered with paperwork that contains information we want to organize. What kind of plan should we have going into it?
A: Before you attack, you need to step back and ask yourself: “What am I trying to accomplish here?” Cleaning financial clutter is no different than cleaning and organizing one’s closet or garage. Most of us feel overwhelmed with the volume and do not know where to start. To lessen the anxiety, assess your financial situation and draw a plan to clean one or two areas at a time. Most plans include banking, budgeting, year-end tax, investments, insurance, credit cards, student loans, mortgage and other debts.
In today’s technology, most financial transactions are conducted online, so the dependency on paper receipts is no longer pertinent. A quick strategy to clean paper clutter is to understand the life cycle and the purpose of receipts. For example, you can dispose of a sales receipt after you record it in your budget unless you need it for a tax deduction.
The basic steps to clean paper clutter are assessing your financial situation and need, identifying clutter, sorting clutter by type or category, organizng it by placing it in designated piles, assessing each pile, dividing documents between temporary and permanent and making a decision to shred or to keep. A rule of thumb is to shred all receipts after you reconcile to month-end statements and your budget, but keep permanent and tax-related documents and receipts.
Q: What kind of documents are okay to toss out and what should we keep?
A: Before you attempt to start shredding and tossing out, you need to create a master plan of what you need to keep, and the operative word here is need to keep. Treat personal and financial documents as having a purpose and a life cycle.
Permanent files such Social Security cards, passports, certificates and licenses, power of attorneys, wills, trust and estate documents, bonds and deeds can be kept permanently as long as they are up to date. Most other documents usually expire in seven years or less. With today’s technology, you can get most documents online and for free, but you still need to keep the most current copy at any time.
You can create your own list of what to keep and for how long depending on your personal and legal needs. For example, there is no need to keep your year-end pay stub after you verify it with W-2 and Social Security earning records, but you would need to keep W-2 forms attached to your tax returns for a minimum of three years if not indefinitely.
Q: In the case of an emergency, what essential information should we compile?
A: You would need an emergency financial kit comparable to a disaster evacuation plan that includes your permanent personal and financial documents, such as your birth certificate, social security card, personal ID, deeds, trust and estate documents, power of attorneys, records of paid mortgages, bonds and stocks certificates and a flash drive or a copy of your financial summary.
The purpose of such a kit is to keep sensitive personal and financial information to reclaim your identity and financial wealth in case of an emergency exit situation. The idea grew in importance after Hurricane Katrina hit the nation and displaced thousands of people with no social or financial recourses.
Q: On a different note, some students will graduate next month and in years to come with obscene amounts of debt. In what ways could having their personal and financial information organized help lessen the blow?
A: Making a personal and a financial plan by getting organized throughout their college years can help students lessen the stress of graduation and provide ample time to take care of other needs. Students who graduate have only a six-month grace period to start making loan payments.
I advise students to start strategizing as early as possible throughout their college life by keeping up with necessary information to meet their financial responsibility with ease after graduation. Defaulting on paying student loans is not an option. It can ruin young people’s lives and destroy their financial reputations.
Q: Having personal and financial information organized can’t just be about having a neat desk, right?
A: Clutter can also be digital. Most of our information is now online and our computer has replaced our paper filing system. We all need to organize our files and exercise caution to protect from identity theft and fraud.
In addition, our wallets need inspection from time to time. It is a good practice to keep copies, front and back, of everything in our wallets such as credit and debit cards in a safe and a secure place to protect against property and identity theft, especially during travel and vacation time.
Q: Any other advice you could provide for folks to stay on top of being financially literate?
A: The hardest thing is to make the commitment and take actions to improve one’s financial literacy. Money is a medium of exchange, but financial literacy is what helps us make informed decisions in line with our values and attitudes toward money management. It is easy to acquire the knowledge and get the skills, but taking actions toward a healthier financial life is what determines the level of financial literacy.