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Why Financial Wellness Doesn’t Work

Our Conversation with Mentoro’s Founder, Rick Kent

Despite the advent of financial wellness programs, many Americans are still struggling to manage their money well.  In fact, recent statistics show:

  • 60% are living paycheck to paycheck
  • 40% are finding it somewhat or very difficult to pay for household expenses
  • 56% are unable to cover an unexpected $1,000 bill with savings
  • Around 55% say they’re behind on saving for retirement

This list could go on and on.  To help us understand why financial wellness does not work, Mentoro sat down with its founder, Rick Kent.  In addition to starting Mentoro, Rick is the CEO and founder of Merit Financial Advisors.  Merit has 36 offices nationwide and services over $6.1 billion in assets.

To start our conversation, Rick said, “When I first heard the concept, financial wellness had a nice ring to it.”  He went on discussing how many companies grabbed ahold of this phrase.  However, instead of offering true financial wellness, they used it to push a certain product such as retirement savings or insurance.  In addition, many companies offered financial wellness for free.  That should be a sign that there is probably a hidden agenda.

Rick then described the current HR department.  Many really want to help their employees but there is only so much they can do.  They cannot sit with each person.  They can put out information and newsletters, but this is not getting their employees enough help.

To change the face of financial wellness, change needs to happen.  First, there needs to be a community for people.  In addition, it has to be affordable with real tools an individual needs.

For instance, if someone wants to get out of debt, she needs access to a debt calculator to see how she can eliminate debt and which approach is best to do so.

In addition to cutting edge technology, individuals need a live person.  This is what separates Mentoro from other companies.  Mentoro has money mentors for its members to talk with.  In addition, Mentoro has made experts part of the community.  Many have struggled in life and their passion is to pay it forward and help someone.

With the changes in financial wellness, we asked Rick what has kept him motivated.  He stated,

“I really see a need that is out there.  And I like to believe that I can come up with a solution to address the people that really need help.”  Rick continued by sharing that money causes many of the world’s biggest problems and so many people have little or no choice.  While the challenge is great, Rick pointed out, “The bigger the problem, the bigger the opportunity for success.”

To conclude our conversation, we asked Rick to look into his crystal ball and predict what others will be saying about Mentoro in 30 years.  His response was, “There was a shift in education and Mentoro figured out how to connect people to help people.”

Mentoro is starting something big to change the face of financial wellness.  Visit mymentoro.com today to set up your account today.  Let’s do this together!

Creating Your Own 7-Figure Story 

Our Conversation with an Entrepreneur Helping Women Master Their Finances

One topic that has been in the news is how financial topics can be seen as unapproachable by certain members of the population.  Key studies have recently emerged detailing how many women struggle to feel that they have a seat at the table when it comes to important financial conversations such as investing and eliminating debt.  According to a recent financial wellness survey, nearly half of women (49%) feel financial stress has taken a toll on their mental and emotional health, 46% say they have lost sleep over it, and 40% believe it has damaged their physical health.  In addition, 36% of women worry about their financial health on a daily basis! We wanted to learn more about this topic so Mentoro can continue to equip women take control of their financial situations so that it does not control them.  To address this issue, we sat down with entrepreneur and consultant, Ashley Bennington, founder of Her Seven Figure Story.

Ashley is a true multidisciplinary entrepreneur who knows the complexities of running multiple brands and scaling businesses in the online space.  Previously working in the corporate space at companies like Disney, Target, Amazon, and Paycom, she knows first-hand what it takes to create a brand that leaves a lasting impression.  In 2021, Ashley launched Her Seven Figure Story – a financial coaching and education consulting business designed to support women in their journey to mastering their finances.

One of the most intriguing parts of this interview was discovering when Ashley started her financial journey.  At the age of 12, many are having a hard time thinking more than a few days into the future.  Not Ashley!  She started babysitting and took other jobs that helped her build up her savings.  She used this money to pay for college – she graduated debt free – and began investing.  This money grew and she was able to buy her first house while in college!

This brings up an important question – When is the right time to start thinking about finances? After speaking with such a hardworking and diligent inspiration like Ashley, we learned that it is never too early to start thinking about your future.

Having so much success with her own financial journey, other women began asking her advice as well.  Throughout these conversations, Ashley heard a recurring theme from many women who felt that they didn’t have a place to learn about their finances in a personalized way that empowered them.  Ashley saw the need to address this issue in the personal finance community, and her mission is based around an idea that is not acceptable when half the population feels out of place in key conversations about personal finance.

Mentoro shares her mission and is striving to remove the stigma around financial conversations so everyone can feel welcome to discuss and not feel trepidation in doing so.

It was so inspiring to hear the way Ashley encourages others to first come up with a financial game plan and how she echoed many of the lessons that Mentoro teaches by saying, “When you have a plan and you are taking financial actions with purpose, everything changes.”

Ashley noted how COVID has changed how women view finances.  Life is so unknown and when the pandemic hit, some women were put in different situations and had to take on new responsibilities.  Ashley pointed out that at the end of the day, we never know what will happen and finances are about being prepared for the unknown impact of life.

Ashley feels the first action anyone should take when getting started is to build an emergency fund.  Ideally, this fund should be able to cover 3-6 months of living expenses.  This will not only give options but also create a sense of calmness if and when financial disaster strikes.  To further elaborate, Ashley feels that “Money isn’t usually the important part of the equation, it’s the situation at hand that you have to deal with.”  Having savings can help deal with the various situations life can (and will) throw at us.

In helping others, Ashley realized she was getting asked the same questions by other women.  She designed this course so women can learn from each other.  This course covers the following topics:

  • Master Your Mindset
  • The 4 Buckets of Financial Plan
  • Debt
  • Investing
  • Budgeting
  • Building A Legacy

To conclude this interview, Ashley highlighted a point that is truly vital. In order to make progress on your goals, it is so important to determine a vision for where you want to be. Knowing where you want to be is so motivating in accomplishing your goals.  She summed this up nicely by stating, “When you know what you want, the action plan to get there becomes so much clearer.”

No matter where you are on your financial journey, we are here to help.  As a Mentoro member, you have access to numerous tools, calculators, and resources that can make your financial dreams become reality.  Visit mymentoro.com today to set up your account.

What’s the Deal with the Housing Market?

Five Key Takeaways from our Conversation with a Leading Mortgage Professional

While catching up on the news, you have may have run across headlines such as:

“Where Are Home Prices in Your Local Housing Market Headed?”

“Housing Market Recession: Housing Starts Down Sharply!”

“Higher Interest Rates Making Buying a Home Difficult for Most”

“Mortgage Applications Hit a 10-year Low!”

YIKES!  While this may seem scary, we all know the purpose of headlines such as these is to get your attention and when you dig into the facts, the actual story doesn’t exactly line up with the headline.  If you are like many Americans who are looking to buy or sell a home, you might be interested in knowing what is actually going on beyond the headlines. Well, Mentoro is here to help.

We recently sat down with an industry expert to help us make sense of the housing market, with a specific focus on how interest rates are impacting mortgages.  Brian McCauley is one of the top producing mortgage professionals in the U.S. and is part of a team that has over 40 years of experience in the Real Estate Finance Industry.  He is a producing branch manager with Fairway Independent Mortgage Corporation and the face of Dallas Mortgage News.

Below are five key takeaways from our conversation: 

1. What It Means to Own a Home

To begin with, home ownership means different things to different people.  Brian feels that owning a home gives you a place to call your own, a place of refuge.  In addition, owning a home is a way to create wealth.  Most houses go up in value – they can be referred to as an appreciating asset – and owning a house is a form of forced savings.  Brian summed this up by stating, “As human beings we can only work so much, earn so much, save so much.  But homeownership, with the appreciation rate, can let somebody get a $50,000 or $100,000 head start.”

2. Tips for First-Time Home Buyers 

First, have the right mindset.  Buying a house is often the biggest investment and purchase you will make so you need to be mentally prepared.

Next, find a good realtor in your area.  How do you go about doing so?  Brian recommends you lean on those you know (and trust) who have bought a house.  Ask who they used as a realtor and then schedule a meeting to see if this person is the right fit for you.  After you find the right realtor, you will need to get pre-approved for a mortgage by a loan officer.

Some very important advice Brian gave is to make sure you can afford the house.  He suggested we don’t just look at the here and now and stated, “Becoming a homeowner is great but you have to get your finances in order, so you won’t have any hardships down the road.”  To help with this, analyze the monthly payments to ensure you won’t be stretched thin.  Traditional advice holds that your monthly payment should not exceed 30% of your income.  While a good starting point, Brian points out this is not a one size fits all formula.  If you have no debt, you may be able to exceed this some.  On the flip side, if you have a lot of credit card and/or student loan debt, you may consider borrowing less.  This is why it is extremely important to run the numbers and make sure your American Dream doesn’t turn into a nightmare!

3. Suggestions for Existing Homeowners

Brian recommends being proactive when it comes to maintenance.  Schedule set times – spring and fall for instance – to inspect the HVAC unit, clean the gutters, etc.  This way you catch any issues when they are minor.  Brian also mentions that home warranties can be a form of protection in case big-ticket items need to be repaired or replaced.

4. Breaking Down Current Housing News

First, we wanted to know how the Fed raising interest rates affects mortgage loans.  According to Brian, while the Fed and the interest rates they set are not directly tied to mortgage rates, mortgage rates usually follow what the Fed does.

In addition, anytime it becomes more expensive to borrow money, (which happens when the Fed increases interest rates) things like the sales of homes slow down.  Brian predicts that mortgage rates will most likely hold steady for the next 6-12 months and then slowly go down.

Many of us remember the housing crisis of 2007-08 and how certain areas of the country were in a bubble.  We asked Brian if this was a repeat.  He does not think so.  Many people got into trouble back then because they bought homes they truly could not afford and overextended themselves.  Brian says now many do not care about the total cost of the house but more about the monthly mortgage payment and if they can comfortably afford it.

5. How Home Ownership Leads to Financial Freedom

Brian pointed out that most homes appreciate (increase in value) every year.  When you combine this appreciation with paying down the amount you owe on the house – this happens every month when you make a mortgage payment – you can see how this can eventually lead to financial freedom!  According to Brian, “There are a lot of things people can buy in life and most of them go down in value.  Homes go up in value, historically, over a period of time.”

No matter what category you are in – whether you are an established homeowner or someone looking to buy your first house – we are here to help.  As a Mentoro member, you have access to the “Goals” tool that allows you to set savings goals linked with your accounts and track your progress through the portal on a monthly basis.  Visit mymentoro.com today to set up your account.

Your Open Enrollment Checklist For 2023

Written by: Gilles Hudelot, Director of Education

When examining your healthcare options, you should always make sure to have as much information as possible. By understanding the plans available, you can make an informed decision to either keep your existing insurance or switch to a new policy. In either case, you should ensure that you make an open enrollment checklist to consider all the most important factors. In today’s guide, we will help you craft your own open enrollment checklist for 2023.

Look at Your Past & Future Medical Care

Many employers have multiple plan types, making it difficult to sort through all of the current options. Ideally, you want to narrow down the scope of your choices to make the process of enrolling in a plan a bit easier. To do this, first look at your preexisting conditions, medications, preferred doctors, planned operations, additional dependents, or pregnancies. This will help you see which plan has the best coverage based on both your past and future needs. Also remember to look into using your spouse or partner’s employer plan to see if it works better for you.

Examine Your Emergency Savings and Deductibles

The amount you have in savings as an emergency fund can influence the type of plan you choose, as you may be able to afford higher deductibles and low-premium plans if you have enough savings available. If you don’t have much in savings, you may not want a high deductible plan. Alternatively, if you do have savings, you might choose a higher deductible, lower premium plan since you have more room to pay medical costs upfront. You will also need to determine how much your employer contributes to your deductible before making a decision.

You may have emergency funds tucked away in a savings account, or you could have a Medical Savings Account (MSA), Health Savings Account (HSA), or Flexible Spending Account (FSA) to save money to pay for your healthcare costs and provide some tax benefits. Typically, MSAs maintain a “use it or lose it” structure. In other words, if you don’t spend the money, you’ve set aside in contributions for that year, you can’t carry those assets over to next year and you will lose the remaining balance. Alternatively, HSAs are limited to high-deductible insurance plans and may have to spend more to receive care but are more flexible because you don’t have to spend the money set aside in the account year to year. You can eventually rollover any unused funds into a retirement account. Lastly, an FSA gives you more flexibility to use your savings for things beyond medical expenses.

Coordinate With Your Spouse’s Insurance

The dates for open enrollment vary from one employer to another. It often depends on how quickly your employer gets the necessary info from insurance providers. If the dates between your employer and your spouse’s employer differ, you might have to make decisions before knowing what your spouse will be able to access. If you don’t make any choices, your employer will typically roll over your insurance from the previous year. However, you will want to pay attention to any potential changes to the costs, providers, and benefits that they use. We recommend checking your plan every year, but if there have been few or no changes, you likely don’t need to spend a lot of time assessing your insurance.

Download Your Carrier App

These days, most insurance providers offer mobile applications to pay bills, view account details, and reach out to customer support. Downloading the insurance provider apps and telemedicine apps can make your life easier by ensuring that both your insurance provider and your doctor are far more accessible. It may not be as useful for emergencies, but many of these apps have resources to help reduce costs or get preapproved for routine procedures.

Decide on Dental & Vision Care

Most people need some kind of dental coverage, but vision may not be as essential, especially if you are younger. However, as you get older, you will most likely want both vision and dental care. Once again, examine your past healthcare needs and think about what you might need in the near future to determine if dental and/or vision coverage are right for you.

Additional Considerations

In addition to those already listed, there are various additional factors to consider and things to remember when enrolling in a new insurance plan:

  • Determine contributions to other tax-advantaged accounts (dependent care accounts, transportation savings accounts, etc.)
  • Make sure that your beneficiary info is up to date
  • Evaluate the life insurance and disability insurance offered by your employer
  • Decide if you want employer-sponsored insurance or outside coverage
  • Consider supplemental disability coverage
  • Determine if you want to increase your 401k contributions based on employer matching, or if you want to use a Traditional or Roth IRA
  • Update direct deposits to send some of your money to other places (savings accounts, pay down debts, etc.)
  • Consider other elective services offered by your employer
  • Remember that the new cost of living numbers are typically announced by late October or early November, adjusting retirement coverage limits and HSA limits for the following year

If you want to learn more about making an open enrollment checklist of 2023 and its impact on financial wellness, be sure to contact the experts at Mentoro today!

6 Things to Do Now in Order to Finish the Year Financially Strong

Written by: Danny Kofke, Motivational Mentor

As we pass the halfway point and approach the final quarter of each year, we often take a more scrutinizing dive into our financial outlook — and for good reason. The end of the year offers everyone time to reassess and see what changes they can make for the next year. Fortunately, financial wellness does not need to feel like rocket science. There are various common-sense methods to help you end the year better than you started it. So, let’s take a look at 6 things to do now in order to finish the year financially strong!

Assess your financial goals

Some people don’t have clear goals in place, while others are meticulous about drawing a financial roadmap. If you fall in the former category, try to come up with specific, attainable goals that align with your financial aspirations. Assuming you already have financial goals, and the end of the year is approaching, take steps to ensure that you meet those goals by the time December rolls around. This way, you can check these goals off your list and begin making new goals for the upcoming year.

Take a look back and see what you did well

It is very easy to get overly focused on mistakes you have made with your money. Perhaps you spent too much on non-essential expenses or you didn’t do enough to track your retirement contributions. While it is important to take note of missteps, you should also look back over the year thus far and figure out what you did right.

Ask yourself: What did I do well? What goals did I accomplish? Which financial achievements am I most proud of this year? By asking these questions, you can identify actions that improved your financial circumstances. In doing so, you can also highlight strengths of your own and turn one-off victories into habitual behaviors going forward.

Ask yourself: where can I improve?

As previously mentioned, it is not a good idea to dwell too much on your shortcomings. However, ignoring problems will not make them go away, either. So, be on the lookout for potential weak areas in your finances. Maybe you didn’t save as much as you wanted the past few months, or you have found unnecessary expenditures in your budget. Regardless of the issue, you want to finish the year strong and start the next year even stronger, so you will need to make some changes. This way, you will have found methods to improve that will make meeting your next set of goals even easier.

Review employer benefits package

Employer benefits like 401k programs, retirement plans, as well as different types of insurance offerings can play an important role in your financial plan. If you want to enroll in insurance or change your existing insurance, make sure to mark the dates for open enrollment on your calendar. During the enrollment window, try to sign up early so that you don’t risk missing the deadline and you have plenty of time to ask questions and make changes as needed.

When it comes to all the different benefits offered by your employer, you should make an effort to know your options and talk to HR to learn more. Then, look at your personal situation to see if you need to make any additions or subtractions. For example, you may have a life event that encourages you to increase your life insurance (like getting married) or even lower your life insurance (like paying off your mortgage). This requires you to know your personal finances to better understand what you need and make the best decisions for your life.

Take one positive step on something you’ve been putting off

Procrastination is a common thorn in the side of financial strategies. It could be saving for retirement, setting up an emergency fund, or paying down credit card debt. Whatever it is that you have been putting off, simply set a short-term goal and make a step toward reaching it. This will allow you to feel greater relief and, in many cases, have greater freedom to address other financial issues as they arise.

Determine your net worth

To determine your net worth, just look at what you own (assets) and subtract what you owe (debts and liabilities). Doing this lets you see the progress you’re making from year to year. In many cases, people solely focus on retirement or savings goals, but it can be beneficial to look at the bigger picture. Evaluating your net worth can help you see if you are making positive gains, and if you’re not, implement new changes for the remainder of the year and beyond.

The Bottom Line

Improving your financial circumstances by year’s end begins with knowing where you stand now. You are the one who cares the most about your money. So, empower yourself with knowledge and know that you can meet your goals and improve your finances. To get started, see where you stand today so that you can move forward to finish the year strong and, just as importantly, start the next year even stronger!

If you want to learn even more about finishing the year financially strong, be sure to contact the experts at Mentoro today!

How the Great Resignation Has Turned Into the Great Attrition

By now, the Great Resignation may feel like old news, but it is still having a profound impact on the U.S. and global economies. There is a lot of conflicting information on exactly how much the sudden wave of resignations has impacted the larger economy, but there is no doubt that it has forever changed the relationship between employers and employees.

According to the Bureau of Labor Statistics, about 60% of traditionally employed, full-time employees have stayed at their jobs. However, the same agency noted that voluntary attrition increased by approximately 800,000 employees, while involuntary attrition decreased by 400,000. [1] This left many companies with the sense that they had lost their best employees and are continuing to struggle to fill empty positions with quality talent. This has turned what started as the Great Resignation into the Great Attrition.

A Brief Overview of the Great Resignation 2022

The Great Resignation is a continuing phenomenon that began in early 2021, during which millions of workers across the world voluntarily left their jobs in pursuit of better opportunities. The COVID-19 pandemic served as a substantial catalyst, ebbing away at public trust in the economy and even governmental responses to the crisis. Many workers saw a lack of stability in their jobs and a sense that, regardless of their own dedication to the company, they were not valued by their employers.

At first, this led many employees to take up freelance work and short-term jobs. However, a growing number of workers are looking out for full-time positions with better pay, benefits, and company values. This has led to a stand-off between some companies that are unwilling to extend their employee benefits too far and unemployed workers digging their heels in with their demands.

The Great Attrition: What Happens Next?

The Great Resignation and the Great Attrition are largely the same; the difference is simply how we view the same trend. At first, cultural pundits saw the Great Resignation as a good wake-up call to companies that had failed to raise wages for decades and only offered paltry benefits packages. However, as supply chains screeched to a halt and many businesses went under, the phenomenon turned from a social movement into a social dilemma. After all, how can the economy function when companies cannot fill positions or keep employees on the payroll for the long term?

As a small company, Mentoro has been fortunate to avoid many of these impacts. However, no company is completely immune to the Great Resignation because it is so pervasive. This means that our employees — and employees all across the country — increasingly want hybrid work schedules, work-from-home benefits, mental health benefits, and more. While these are not unreasonable requests at the individual level, they can be overwhelming when all or most employees are asking for the same things.

There is no way to predict the future with 100% certainty, but it stands to reason that the tides will eventually turn. The workforce gaps in dozens of industries will start to have too many negative impacts on the overall labor market. There are only so many accommodations a company can make before it eats into its bottom line. So, at some point, there will be a shift back to a more balanced state between employer resources and employee demands, most likely presenting itself differently than before. It’s not so much a matter of “if” but “when.”

Understanding the Complex Labor Market With Mentoro

The pandemic allowed employees to reevaluate how they view work and the role that work plays in their lives. Today they are realizing not that they don’t need a job, but that they need a better job, with better benefits, and a better sense of feeling valued. As time has shown, this can have a negative impact on employers because they don’t have the processes in place to support that. But what are the processes they need to accommodate some or all of these new demands?

Mentoro’s financial mentors have highlighted three key areas in which companies can improve for their current and future employees:

  1. Work to understand your employee base. What are workers thinking and feeling? Because many are not thinking or feeling the same way they were 5 years ago. We are in the new normal. Therefore, employers have to listen to their employees through surveys, focus groups, or even water cooler talk to learn as much as possible. From there, companies must be willing to use that information to change the profile of their organization or their talent (if necessary).
  2. Be proactive instead of reactive. Companies that are struggling with the Great Resignation are often those that decided not to address it quickly enough. A pandemic is hard to plan for, but transparency is not. Addressing exhaustion and capacity issues will help avoid burnout and keep employees more content with their current positions.
  3. Consider the employee experience. There are generally two big reasons people leave a company: either their job interferes with their lifestyle (long hours, low pay, etc.) or they don’t feel valued or part of a bigger purpose within the company. Employers must think about how they can improve the employee experience to reduce voluntary attrition and build a stronger, happier, and more productive workforce. A few common solutions could include mental health days or financial wellness benefits.

If you want to learn more about the Great Resignation and its impact on financial wellness, be sure to contact the experts at Mentoro today!

Sources:

  1. Bureau of Labor Statistics

https://www.bls.gov/jlt/