Financial tech startup Brigit, an app that gives economic advice to users, came to Baruch College to give a class on making good economic choices and planning for the future.
Brigit is a year-old financial tech startup, and its mission, according to the company’s website, is to help people with their financial problems.
Brigit’s money protection service aims to put cash into peoples’ overdrawn accounts to stop them from getting overdraft fees.
Vsevolod Filippov, a current Brigit intern and a senior at Baruch, planned the event. When asked what he hoped students would learn from the presentation, he said that a lot of students have problems budgeting their money and he wanted this presentation to help students better plan for their futures.
The financial literacy workshop focused on budgeting money, managing cash and investing money for the future. Brigit’s co-founder and Chief Risk Officer Len Kunin led the workshop.
Kunin spoke about what students can do now to start saving for retirement. He spoke of the importance of saving for retirement early on, particularly for people currently in their 20s or younger. He also explained that one-third of senior citizens are living entirely off of their social security checks and the social security program will most probably be over by the time today’s young people retire.
Kunin recommended that for every dollar of income that people plan to live off of during their retirement, they should save $15.
When spending money, Kunin advised that students should think of the short term and the long term benefits that they would get out of their purchases.
Kunin explained the importance of setting financial goals as early as possible to achieve them in the long run. He recommended Brigit’s website myhiddenfees.com as a way of checking possible fees a person might have in order to avoid them in the future and to track where their money is going.
Kunin also spoke about building credit scores. He advised students to get credit cards as soon as they can, to make small purchases on the credit cards and to pay them off on time to increase their scores.
Kunin explained the issues with having credit card debt and how people should not build up their debt with credit card companies. He said that people should “stay on the business side, not on the victim side” with credit card companies by paying their bills on time and not paying interest on overdue charges.
Kunin told students that by paying their credit card bills on time and getting a low utilization ratio, they can easily increase their credit scores, which will benefit them when they apply for loans in the future.
In terms of emergency funds, Kunin said that the general rule is for a single person to save six months of salary for emergencies, while a married person should save three months of salary. To be an investor, “you must think long term and not rush or panic” when small changes in the market occur, said Kunin.
For investment products, he recommended products that say “index funds” and charge a very small fee as opposed to the free ones that he says are actually the most expensive products.
Kunin compared the different retirement plans, the 401K, the IRA and the Roth IRA, and what each plan offers.
He also spoke about the differences in the federal taxes and state taxes that are taken from each retirement program and how they are removed from the program at different times.
Kunin warned that the money invested in these retirement programs becomes illiquid, charging high withdrawal fees.
He said that although students do not have much disposable income to put away for the future, even investing a small sum into a retirement program each year from now on will be beneficial in the longterm because the money gains interest each year it remains in the fund.
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