Expert Interview with Jason Vitug on Being Financially Literate for NewRetirement.com
If you ask Jason Vitug, financial literacy is the single most important issue in America, impacting our life and economy.
“The unfortunate reality is that we aren’t taught about money at school,” he says. “We learn how to calculate the circumference of a circle but not about compound interest.”
And while government organizations and nonprofits are working hard to educate millions of people, he says that education hasn’t factored in how people learn about money through search engines and social interaction.
That’s why Jason created Phroogal, a crowd-sourced database focused on personal finance. With Phroogal, Jason hopes to help people easily find honest, direct answers to their money management questions. Here, he shares more about his site and discusses why we should all invest more time thinking about our finances. Read on:
What’s your background in personal finance? Why are you so passionate about helping people understand the topic better?
I’ve been in the financial services industry for close to a decade. I’ve worked as a teller, financial services representative and branch manager. The last position I held was vice president of a $120 million credit union headquartered in Silicon Valley. I’ve had my fair share of personal finance problems that included $40,000 of student loans and credit card debt by the time I was 22. I was able to pay that off entirely but eventually accumulated $80,000 after graduate school and living life to full excess.
I wasn’t struggling financially, but I was definitely living paycheck to paycheck. My love for personal finance started when I became more involved in providing financial seminars around the country. I immersed myself in the topic and realized all the mistakes I was making, but it all stemmed from my money mindset.
I was equating living life to the fullest with spending. When I finally curbed my spending monster, I realized how much more I could actually do with money. It was then I realized the more I knew about personal finance, the better financial decisions I would make.
Everyone should have the opportunity to live the life they’ve dreamed, and it isn’t about giving people a new house, car or a bag full of cash. It’s giving them the ability to have control over their financial lives through knowledge.
Tell us about Phroogal…what is it and how does it work?
Phroogal is the easiest and best way to access financial knowledge. Think Google, Quora and Yelp on personal finance. We’re building the largest knowledgebase on all things money by crowd-sourcing knowledge through an ask-and-answer platform. We launched our beta in February 2014 and our database has grown to over 14,000 answers.
Six in 10 people use search engines to find answers to their money questions. They are left with results that are search engine optimized and advertised. We’ve basically left it to Google and online marketers to determine what information is relevant to our situation.
Who should be using Phroogal?
Because my cofounder and I are millennials, our market has organically grown to primarily be 20- to 34-year-olds. However, we do have hundreds of users who are over the age of 40. Anyone who is actively searching for answers to personal finance questions should come check us out. Financial experts also have a place with Phroogal, as they can provide their knowledge to our members and potentially gain new business.
Why do you think money should be a community conversation, rather than a private one? How can we help each other?
Money has always been a taboo subject, but we learn our money habits through social settings. Our first experience with money is observing our parents’ relationship with it. As we got older, our money habits evolve based on the people we associate with as friends or coworkers. Additionally, we are influenced more publicly through movies, songs and advertising.
There is a shift I am seeing play out in social media. More people are open to asking social connections and strangers for answers to their financial questions. I see a future where this will become more acceptable, and I’m building the technology that will factor in our social connections when vetting financial information.
We can all learn something from each other. We all have stories to share, some of which we might be embarrassed about but can help a family member or friend avoid the situation. There will always be a place for private consultation, but we can make it easier to access the public information that’s already available.
What do you think are our biggest misconceptions about personal finance?
The biggest misconception is that personal finance prevents us from doing the things we want to do. Personal finance can be fun, and it’s not about limiting our lives but finding ways to live the life we actually want to live.
What can we do to improve our literacy? What areas of personal finance do you think would be most important for everyone to have knowledge about?
We need a better system in vetting financial information online. That is where a majority of people are looking for information. They seek answers when they are about to make a decision. It’s important to have classroom time to lay the foundations, but we need technology (ahem, Phroogal) that will allow people to find just-in-time financial information.
The single most important personal finance topic is budget. However, the topic needs to be related to how budgeting can help you live the life you want today. That motivates people to budget more effectively and consistently.
What do you think are the best methods and/or tools for learning about personal finance?
Courses are helpful, but I really don’t see many people sitting down going through a course unless they need specific help. I definitely believe people should read more personal finance blogs, reach out to their primary financial institution and ask about financial education services they offer; government organizations as well have amazing resources. Additionally, I plan for Phroogal to become the central portal that connects all these pieces together so you can find the personal finance blogger, the financial services and government resources more easily.
What are the smartest things we can do with our money?
The smartest thing to do with money is to understand and acknowledge your relationship with it. It sounds rudimentary, but it’s the best piece of advice I can give. Take a deep hard look at how you think about money because you’ll gain important knowledge in its true impact.
What aspects of money management should retirees be most concerned about?
When we think of retirement, we envision the moment in our lives in which we get to finally live that dream lifestyle. Most of the focus is on how much free time we’d have because we no longer have to work. However, many wonder if they can ever stop working because they don’t have any money saved up. That’s really the wrong mindset. Retirement isn’t just an age – it’s a phase in our life where we get more control over our time.
My sister shared that she looked forward to retirement when she could travel the world. My first remark was, “Are you going to be able to do all that hiking at age 70, or would it better to figure out how to make that happen today?”
People can retire at age 35 or at 70, but that all depends on making better financial decisions and having a sound money management plan.
Retirees and future retirees should focus on the lifestyle they envision living in that retirement phase. Calculate the cost of that lifestyle and make the necessary changes to live it today. This includes having a healthy savings plan that includes short-term, mid-term and long-term goals.