Financial Literacy—and Beyond

  A new program is not only providing financial literacy coursework, it’s paying people to get free services from a financial planner.

The financial services world has spent decades searching for a way to provide effective service and advice to the people who need it most.  Mainstream firms work with people in their 40s, 50s and 60s who have accumulated significant assets.  There is sporadic pro bono work with people who have experienced emergencies or tragedy in their families, and younger advisors (particularly the XY Planning Network) work with up-and-coming professionals and workers on a subscription basis.

But I would argue that the biggest need is people who are making their first key financial decisions and may not even have the cash flow to afford a subscription-based planning relationship.  This is the cohort who are just starting work and developing (or not) their first (and perhaps life-long) savings habits, deciding how much (or not) to contribute to their 401(k) plans, who have the best chance to put the power of compounding to work for them, and often fail to do so for decades into their working lives.

What can we do for them?

Until now, the answer has been high school financial literacy programs, which teach the basics of personal finance as an elective.  But that is, at best, an unproven solution to getting people to make excellent financial decisions when they enter the workforce.  I’ve recently come across a new program that aims its education and intervention at a different focal point in a consumer’s life, and provides it in a way that I haven’t seen before.

The program is called 3rd Decade (  You can call it a financial literacy program if you want, but it seems to be more than the term would imply.  The program was founded by Robert Swift, founder of TCI Wealth Advisors, a fee-only wealth management firm based in Tucson, AZ, with six satellite offices.  3rd Decade is a nonprofit that was created to address financial literacy and help younger people make better financial decisions.  Better yet, it is available for all financial planning firms everywhere, provided they’re fee-only and willing to recommend a passive investment approach to younger clients without much money. 

“It took us five years, and in the first two or three, we stumbled, fumbled and got humbled,” says Swift.  “But now the program is really working.  If people are interested in getting young people up and running early, I think we’ve stumbled onto a really cool way of doing it.”

3rd Decade actually started as yet another high school literacy program, and Swift was unsatisfied with the initial results.  “One of our epiphanies early on,” he says, “is debunking the notion that you can have a big impact in junior high or high school, or even college.  We found out that’s not really true.  Until they get their first real job, and have a 401(k), their motivation to listen and learn is actually very low.”

So Swift shifted gears, and aimed the program at a more mature audience.  The result is a four-part curriculum that is offered to people in their early years of work—their third decade (hence the name), when they’re starting to make real financial decisions.  “Part of our qualification is that you have to be age 18 to 35, out of school, renting or buying, and you have to have a household income of no less than $35,000, but no more than $100,000.  That timing is very key,” Swift adds, “because that’s when they’re ready to listen.”

Participants sign up for the program, and take four two-and-a-half hour classes, one class a month, under a curriculum that was developed by Megan Kirts, a high school economics/personal finance teacher who also happens to be a winner of the Arizona Teacher of the Year award. 

The topics are mostly what you would expect. 

“Investing is a piece of it,” says Scott Bennett, 3rd Decade’s executive director.  “Saving and how much to save.  Emergency funds, and how much to target.  Budgeting, and should you have renter’s or homeowner’s insurance?  Term insurance, taxes and what does the standard deduction mean?  The basic simple stuff that somebody who just graduated from college and started their career would have questions about.”

After the fourth class, each participant takes an online test that I doubt most consumers would pass.  (Sample question: True or False: 401(k) and 403(b) accounts allow larger annual contributions than Roth IRAs. Or:  One’s effective tax rate is generally higher than one’s marginal rate.)  If they score an 85 or above, the participants receive $500 to put into a Roth IRA account.  How they invest this free money is up to them, so long as it is in a Roth from the start. 

“Mostly we recommend that they set up an account at Vanguard,” Swift explains.  At the moment, this money comes out of a foundation that Swift created to fund the nonprofit, but eventually he hopes that the nonprofit will receive charitable funding.  “We’ve already received $200,000 in unsolicited donations,” he says.

The value of planning

Another epiphany that the trial-and-error produced is that the participants needed more than coursework to set their financial feet firmly on the ground.  Sometime after they take the first class, the younger consumers are matched up with a financial planner, who sits down face-to-face and provides them with a comprehensive financial plan.

“One of the things we realized is that young people have no idea what the value of real financial planning is,” says Swift.  “They think it’s Wall Street trying to sell them something.  So we figured, why not show them?  We say: We’re going to give it to you for free, because it’s important for you to get a good start in your 20s.  This is somebody who really cares about them, is not selling anything—and if that’s the proposition, they really do sit down and listen to the advice.”

This, Swift believes, is the key differentiator for 3rd Decade.  “It seemed to us that everybody was trying to solve these financial literacy issues with less than a full advisory approach,” he says.  “They were offering scaled back services, and sometimes with a sales agenda.  But these people deserve the same advisory financial planning serious approach that a millionaire does, so that is our starting point.  Once we added an advisor to the process, it became very powerful.”

This free advisory relationship goes on for two years, and includes a discovery meeting, plus a check-in every six months, and another face-to-face meeting in the second year.  The participants, meanwhile, can contact the advisor and ask any questions that arise during this two year period.

The financial advice is totally nondiscretionary.  “We give them advice on how to invest, and help them set up the account, but it’s theirs to manage,” says Bennett.  “They decide the allocation.”  And, he adds, the planner who works with the participant is forbidden from being that person’s financial planner for five years.  So not only are there no product sales in the relationship, but every financial incentive has been removed.

There’s more.  When the participants “graduate” from the program at the end of two years, they receive a second $500 contribution to their Roth IRA.  That makes (for those of you keeping score) a total of $1,000 incentive to participate in 3rd Decade.

“Our proposition is: not only are we not going to charge you, but we are going to give you that carrot to complete this program,” says Swift.  “People have been telling us that you have to charge for this kind of advice; otherwise they’ll be suspicious of it,” he adds.  “But this younger generation is very suspicious of Wall Street, and that’s how they see all of us.  They have no idea of the value of working with a financial planner.  So we decided to pay them to learn that value.”

Interestingly, from surveying current and past participants, the 3rd Decade team discovered that the current wave of participants are not joining for the carrot any more.  “The program carries itself now, but in the beginning we had to do it to generate interest,” Swift adds.  “We’ve decided we’re going to stick with that carrot, even though we’re hearing that it really doesn’t matter any more.”

To date, 586 people have graduated from the 3rd Decade classroom program, and just over 100 have graduated from the full two years of advising.  An additional 650 are enrolled in the program now, and the foundation is in the process of creating a systematic way of collecting data from the graduates, to measure the effectiveness of the classroom instruction plus two years of financial planning advice. 

“What we know so far is that there has been an average $39,000 net worth increase of the people who have completed the two year program, in just those two years,” says Swift.  “And these were all what we would call moderate income people.”

Turn-key curriculum

The first five years have been a proof-of-concept.  The goal for Swift and Bennett is to take 3rd Decade to the financial planning community, and make it a nationwide initiative.  “We’ve learned so much from our trial-and-error, and from the last two successful years,” says Bennett.  “One of the most important epiphanies is that this needs to be a nonprofit.  You cannot solve the financial literacy problem if there’s any kind of a sales agenda involved.  There have been a lot of well-intentioned programs for young people, but when there are for-profit motives, they don’t seem to get any big numbers of people, and they don’t seem to help those with moderate income.”

To make 3rd Decade a nationwide program, the organization will solicit donations in two forms.  First, Swift is asking interested donors to fund a Roth IRA for one student a year for five years, and he hopes to get 1,000 people in the club.  The organization is talking with larger financial services firms (Dimensional, Vanguard and Schwab are on the list) to make bigger donations.

Second, Swift is inviting planning firms around the country to sponsor their own classes.  They will be provided, at no charge, with the turn-key curriculum, the online test, and the participating firms will provide their own planners to teach the classes and provide newbies in the job market with real financial planning for two years. 

“Think of it as a licensing model,” says Swift.  “If you’re in Minneapolis or Atlanta, and you’re a good advisor who shares our investment philosophy and motivation for helping this group of people in your community, you can become a licensee of the program, and assign young advisors to participate.”

Why not just set up Zoom meetings from Tucson?

“Our participants have consistently told us that there is a benefit to having one-on-one interaction in the classroom, and one-on-one face-to-face interaction with an advisor,” says Swift.  He acknowledges that this personal approach is more labor-intensive, but for him, the important goal is the outcome.  “I tell people,” he says, “that every firm can allocate one or two advisors, about ten percent of their time each year to teach the classes and advise anywhere from 25 to 50 kids in your area, per year.”  He envisions a day, within five years, when there is a self-sustaining 3rd Decade national brand where anybody from age 18 to 35 can find an advisory firm participant in their area.


Lily Strymoe is a young financial planning associate with TCI Wealth who recently passed her CFP exam after graduating from Northern Arizona University with an environmental sciences degree.  She’s been working with 3rd Decade participants since January.  “When participants are going through the course, they can sign up with any one of the advisors,” she says; there is a website with a list of advisors, their credentials and interests, and their pictures.  In the last class, ten participants chose her and Strymoe provided a full-scale financial plan for them.

“With younger people, it’s really important that we take the time to understand where they are, and what they need to prioritize as they’re making their way through these first key moments in their lives,” says Strymoe.  “Do they want to buy a house?  What is their debt ratio and what does that mean to them?” 

Strymoe defines a comprehensive plan as first going through a budget with the clients, line by line.  “Where is the money going, and what does that mean for your overall cash flow?” she says.  “The process shows what they can be putting away.”

The financial plan is followed by a net worth statement, and a discussion of an emergency fund.  “At the end, we do some retirement projections,” Strymoe adds.  “It can be a little abstract for a lot of our younger clients, since that’s, like, 50 years in the future,” she admits.  “But it helps them to see the power of compounding at their age.  If we can max out their Roth every year, starting now, what will that grow to by age 67?”

Strymoe acknowledges that the net worth statement can be a bit discouraging for a young couple who are groaning under student loan debt.  “But it can be a really cool measure,” she says, “because we meet with them a year later and update that statement.  In one year, you can get a really good indicator of how they’ve changed their habits and what they’ve saved in the past year.”

So far, Strymoe hasn’t had a second meeting with clients, though she has had followup conversations.  But she thinks that the fact that there IS a second meeting can serve as additional motivation.  “They have a spreadsheet, and we’ve come up with some tangible goals, and they know we’re going to have that next meeting,” she says. 

How effective is the coursework, in her opinion?  “When I meet with people before they’ve taken their second or third class,” says Strymoe, “we have to spend a bit more time on debt, or on mortgages, or student loans.  But,” she says, “by the end of the course, the students who are meeting with me are very different.  Their vocabulary and their confidence in what we’re talking about is really much further along.”

Strymoe also says that she looks forward to something that Bennett and Swift didn’t mention: the Arizona classes taught by TCI advisors has a graduation ceremony after the students complete their coursework.  “The first one was really fun,” she says.  “We met at one of the local breweries, and I got to see everyone I worked with in the first round, and talk about how it was going.  A lot of parents come out,” she adds, “and significant others will be there as well.”

Strymoe’s day job at TCI involves support work for lead planners, sitting in client meetings and presenting research.  That’s rewarding work, she says, but she feels more of a connection with the 3rd Decade participants that she can work with one-on-one.  “I feel like working with the foundation, you feel like you’re making a big difference in peoples lives,” she says.  “With so many of these students that are my peers, around my age, it feels great to be part of their financial education.  You can make a really big difference with people who otherwise would never be exposed to this kind of financial advice.”

Financial confidence

But are the students really getting as much out of the program as the founders and planners believe they are?  Nikki and Colin Wolff have recently completed the 3rd Decade coursework, and have met with their advisor for the first (but not the second) time.  What did they learn?

“The classes, the big thing that they drove home was BFT,” says Nikki, who works as a program director for a nonprofit in Tucson.  “It stands for behavior, fees and time.  At the end of the classes, they give everybody a mug that has the logo of the foundation on it, and BFT, the reminder that those truly are the biggest indicators of whether or not you’re going to financially succeed over the long haul.”

“At our age, time is our biggest asset,” says Colin, a graphic designer who works in communications for the county attorney’s office.  “The earlier you get going, the better off you will be.”

Colin and Nikki were not complete financial novices when they entered the program.  Nikki had learned budgeting out of necessity; she had to make her merit scholarships last through college so that she could graduate debt-free.  Colin graduated with just $15,000 in student loan debt.  “I’ve never believed in debt,” says Nikki.  “I learned to take what I was given and make it last so that I didn’t have to go into any debt.”

The Wolffs say that the students in the class came from all backgrounds and knowledge levels, which represented a challenge that the course instructors handled well.  “They found a fair balance of being able to engage everybody,” says Nikki, “keeping it basic enough so that people who didn’t have a lot of knowledge would be able to understand it, but keeping it complex enough that people who do understand are not bored out of their minds.”

Nikki says that she felt like she fell somewhere in the middle of the spectrum.  “I had already gotten a lot of the behavioral things down,” she says.  “But I had no clue what to do with the actual investing piece.  What is an expense ratio and how do you find it?  I didn’t know what an index fund was.  They covered things like insurance, which can get pretty complicated.”

Colin was impressed with the discussion about renting or buying a house, saying that they didn’t recommend one over the other.  “They showed us how to do a cost comparison, and challenged the idea that buying a house is an ‘investment,’” he says.  “You have to look at the cost over time.  People tend to say, look how much my house gained in value over this amount of time,” he adds, “but they don’t typically weigh that against the cost of maintenance and tax and things of that nature.”

How hard were the tests?  “After going through the program, I did not find it difficult to pass the tests,” says Nikki.  “If somebody hadn’t been paying attention, or never took the course work, I don’t think they would have passed.  But it seemed like all of our classmates were engaged, and took it seriously.  Everybody contributed questions and discussion.”

“Overall, they left the ball in your court,” says Colin.  “They give people the tools to take the initiative themselves, and do some self-education.  I don’t see how anybody could go through the class and not, at the end of it, be driven to learn more and to put these things into practice.”

The financial planning meeting offered a very different type of value to the 3rd Decade experience.  “The first time we sat down, our planner jotted down all our savings, all of our expenses, and then she started labeling out discretionary vs. nondiscretionary expenses,’ says Nikki. 

This made it easier to see how much could be invested, and what lifestyle and spending changes would be possible.  “I really appreciated the fact that there was never a time when she said: you should do what I want you to do, and if you don’t, you’re doing it wrong,” says Nikki.  “I think we ended up investing more than we necessarily need to,” she adds.  “We’re maxing out our IRAs and saving for a down payment on a house.  We want to use the time that is on our side, so that’s what we ended up doing with our extra money.”

But where to invest?  “I have a 403(b) plan at the nonprofit I work for,” says Nikki.  “She took the time to look through the funds I had available, and then recommended the allocations.  It was really helpful,” she adds.  “I remember looking at about 50 options, and going: what the heck?  I don’t know what any of these are.”

Nikki is 24; Colin is 25.  After going through their first planning exercise, they feel like they’re more than on track to retire at age 50—their provisional goal.

Do they feel confident financially?

“I absolutely do,” says Nikki.  “With the combination of what I’ve gathered throughout life and what I gathered through the 3rd Decade program, Colin and I are way ahead of where we were.”

And they haven’t had their second planning meeting yet.

Financial motivation

The 3rd Decade program, so far, has taken on a life of its own in the cities where it has been introduced.  “When I talk to other advisors,” says Swift, “the first thing they want to know is: how do you get people to come?

Swift admits that he had that concern at first as well.  “We started out by gathering up people we knew, either internally or from our clients’ kids, and it really wasn’t that hard to get a first class going.”

Then, from an initial class of 20 people, word got out.  “You probably know how young people are in that social media world,” says Swift.  “When they like something, they tell everybody else about it, and the classes started filling up.  We had to go from one class to two classes to three classes, and now we have 200 people on a waiting list.  I tell people, find 15-20 kids for that first class, and then the brand gets its own momentum.”

The question I find myself coming back to is: is this, finally, the answer to our nation’s financial literacy challenges? 

There are a variety of differences between 3rd Decade and anything I’ve seen before it, including the funding of Roth IRAs, the online test that qualifies for the award, and having a chance to try out the services of a financial planner, with no hidden agenda, for two years.  The biggest epiphany about the program seems to be how much more motivated people are to learn about and put in practice good financial habits at that particular moment when they enter the workforce, than they are in high school or college.  In fact, the level of motivation has startled even Swift.

“I draw a distinction between inspiration and motivation,” Swift explains.  “Motivation is short-term; they pass the test, they say they’re going to do the right things.  In my mind, inspiration is long-term.”

He’s found no shortage of inspiration potential among the participants in the program so far.  “One of the things we talk about is when you are a good financial steward of your money, there is a ripple effect,” Swift explains.  “We ask, How many of you are first generation college?  And about half of them will raise their hands.  Then I say: How many of you will be first generation millionaires if you make it there?  And almost all of them raise their hands.

“Then I say,” says Swift, “the beautiful thing about being a financial steward of your money is that even though your goal is to have enough money for your life, you end up with more money than you need.  All of a sudden the notion of first-generation philanthropy comes into the equation, and we talk about it. 

“And,” Swift adds, “you very quickly discover that this generation has a major interest in doing the right thing and helping the planet and being philanthropic and charitable.  It’s a big inspirational point.  The conventional wisdom is that they’re just sitting at home playing video games, and don’t care about anything.  But you look a little closer, and they really do want to make the world a better place.  It’s an inspirational thing to see.

“The big point I want to make about this is that it’s a win, win, win. Everybody wins,” Swift continues.  “The community wins, the people in the program win, the financial services profession wins.  And it is not that hard.  We have the opportunity, if this takes off, to get a whole generation up and running.”

Interested in participating?  Here’s a link where you can explore your options and potentially sign up: