How To Prioritize Your Savings Plan: Short-Term vs. Retirement vs. 529 Education Savings



Christina K. (Host)

Welcome to everyone joining us today! We’re really excited to be talking about an extremely important topic. We are joined by a very special guest, Arizona State Treasurer Kimberly Yee, and soon, we'll be diving into the topic of how to prioritize your savings plan. There's a lot of information that I'm sure you are ready to share with us. It definitely can feel overwhelming to think about our savings goals. There's so many things we are being told to save for! I'm excited to get your perspective on those things.


Poll Questions


I’ve already started saving for…?
• Short-term needs (36 responses)
• Retirement (54 responses)
• 529 Plan Education Savings (12 responses)
• Not much, yet! (4 responses)
• A different savings goal (7 responses)

What are you excited to learn about today?
• Short-term and emergency savings goals (36 responses)
• Retirement Savings (27 responses)
• Arizona 529 Savings Plans (15 responses)
• How to balance between multiple savings goals 16 people


Christina K. (Host)

Are you new here? Here’s a little bit about us. Copper State Credit Union has eight branches in Arizona and over 42,000 members who trust us to do their banking. We offer everything that you'd expect from a financial institution, and more! If you're not already a member, please check us out. Our values focus on family, empowerment, discovery, and excitement, which (surprise, surprise) all can be part of your financial life.

Now, let’s introduce our special guest. Arizona’s State Treasurer, Kimberly Yee, oversees the cash management of Arizona's $53 billion state budget and payments to agencies, local governments, and schools. Upon taking office in January 2019, assets under management were at $15.4 billion, and today assets are standing at over 23 billion. That's an increase of over 50% in just about two years, which is very significant. Treasurer Yee led the effort to pass the state law requiring students to have financial education in high school before graduation, and was the first state treasurer to have visited all 15 counties in Arizona during the first year of her administration. Born and raised in Arizona, Kimberly is the first Asian American elected to a statewide office in Arizona's history. She's the first Chinese-American Republican woman to win a major statewide office in the history of the United States. She served for eight years in the Arizona legislature in the house and Senate. She also served as Senate Republican majority leader - the second woman elected to this position in Arizona's history, following US Justice Sandra Day O'Connor, who served the position in 1973, 44 years earlier. Treasury Yee has been named one of the nation's 25 most influential women in state politics by congressional quarterly's roll call. She was also featured nationally in lifetime television’s “Her America” featuring one woman from each state who is making a difference in America. Prior to elected office, she worked in the administrations of two governors, Pete Wilson, and Arnold Schwarzenegger, and former state treasurer, Dean Martin. Kimberly is a graduate of Pepperdine University where she earned degrees in English and Political Science. She holds a master's degree in Public Administration from Arizona State University, where she was a member of the honor society of Phi Kappa Phi. Kimberly is married with two young children and active in her church and community. Thank you so much again for being with us today.

Treasurer Kimberly Yee
Thank you so much, Christina, for having me with your wonderful organization and your 42,000 credit union members.


Why is financial literacy so important?


Christina K (Host)
My first question for you is about financial literacy as a whole – this is something that you're clearly very passionate about having created the financial education task force and putting into action those updates to the high school graduation requirements. Can you tell me more about why this topic is so important to you?

Treasurer Kimberly Yee
Oh, absolutely! Well, it was many years ago, probably 15 years ago when I was working for a former state treasurer. His name was Dean Martin. One of the things that I did in my capacity was to go out to various schools, whether they be K-12 or universities, and speak about the importance of managing your money. One of the sessions that I did at a university was during their orientation week. As I was walking to my seminar, I was walking towards the ballroom, and in the hallway, there were numerous credit card companies lined up, signing up new students for one credit card after another. It was visually for me, the scope of where our issues lay. I wanted to ask these students as they entered my seminar, how many of you just signed up for your first credit card?
And so many hands were raised, and the second question I asked was how many of you have ever had a financial education class in high school? The hands were not raised and that really showed me uniquely how much work we have to do and why we have a student debt crisis.

As the years passed on, again, that was when I was working for the former state treasurer 15 years ago. I served in the legislature, and one of the first bills I wanted to sponsor was putting this [financial education] into our classrooms because it really starts from the very beginning. If you're not getting it in your home setting (and not all kids do) you really want to be able to teach the basics in the classroom. I put a bill together (state law since 2011) which requires our state academic standards, which are benchmarks for what teachers are asked to teach in that grade level before they move a student onto the next, to have a standard on financial education, which means that it's grade appropriate.

In kindergarten that you may provide options for teaching bank savings that's appropriate to that five-year-old. When you're in high school, you can teach a little bit more in-depth discussions of managing your money, like having a checkbook, opening a the checking account savings, budgeting. These are all now in state law from an academic standards practice. But when we tried to get an actual class into the schools, we actually hit some roadblocks. It was very interesting because so many of my friends from the credit union world came alongside me. We testified, we shared the story of reasons why we need this, but again, there are those who have their plates full in our classroom, so it just didn't go through as a bill.

But then, later on, I became State Treasurer. In 2019, when I took my oath of office, the first thing I shared with my new administration was that financial education, financial literacy, and money management was going to be a priority among the many things that we do in our office. This is going to be a priority. By the spring of 2019, in my first year, we put that law on the books. High schools must now teach at least one semester of financial education before a child graduates from high school. And that was fit into that one semester already required for economics. A district can teach economics alongside financial education, which are two separate things, but very important. This now allows for a young person to get out into the real world with their new high school graduation degree, to be able to have this real-world knowledge and skills to survive with money in your pockets and being able to just the basics. Many students who are in our classrooms don't know the first thing about the consequences of not paying off your credit card. If they don't learn that they will fall into a spiral of debt and none of us want that.

What I have done with our friends in the credit union community, (I'm a long-time member of a credit union.) My children, when they were born, I took their new funds that they got from their baby gifts and created accounts in my local credit union. I believe in what [credit unions] do from a personal standpoint and so I've actually come alongside some credit unions across the state of Arizona hand in hand with students and going into those classrooms to talk about savings and being able to share with them – “Guess what? You have a credit union right here in your school neighborhood that you can start your accounts as early as elementary school, and you can start compounding that interest!” It's amazing what we can do when we work on these partnerships together.


Christina K (Host)

I love that so much. The earlier they can start and learn about the value of savings, the better!



What should be a first priority for savings?


Christina K. (Host)

This connects so well to what we're going to talk about today: Savings. I could sit here and rattle off so many different types of things that everyone should be saving for - an emergency, this goal or that goal, vacations, house down payments, retirement, education, and the list goes on. It feels overwhelming.
If you had to choose one of these savings types that everyone should make a first priority, what would that be? I mean, you manage $53 billion a year, so you're the one I want to hear it from.

Treasurer Kimberly Yee

Oh, it's a great question, especially now, because we just came out of a year that was unpredictable, and these are times where if you don't have an emergency savings set aside, you really can feel very vulnerable. And so that would be my recommendation is that first and foremost, to establish an emergency savings account or a fund that you can start with very little if that's what you have, but just start it. When you have that money put aside, and you put a little in every month. It actually starts to grow. On that rainy day or that situation where you don't expect an expense, you have that money already set aside, and as we are entering the holidays, what a perfect time now to be able to start thinking about that! What happens is there are cycles throughout the year. We all are moms and dads, and we have our families. We have different things, but we're all busy. And then once those obligations financially come, sometimes you're like, oh my gosh, it's already here. I've got to do all of this, and I don't have the funds set aside for it. It could be your emergency fund for just you. You could set aside different ones. You can have the ones that are your emergency funds that you do not touch unless it's an unexpected expense that you would never predict.

Then you can have the ones that you put forward. You put a fund aside for just holiday spending or when the expenses, they grow actually at the later part of the year because you've got a lot of things that come up that cost a little bit more. These are the things that you can put aside. So that when those months come, you're ready. We actually in my office have done a number of tips for savings during the holidays, because you want to be ready for that. You also want to be very intentional with your purchases. If you're spending is lighter, then you can maybe afford a little more. You have to be intentional when you walk into a mall or a store. Only visit the aisles that you want to because when you start window shopping, it gets a little dangerous.

And then also start really tightening up where you need to, because if you have some extra expenses that are just bonuses for you, like an extra latte or two or three or four during the week, maybe you say, gosh, I'm going to not do three this week. That money is set us side for my savings that's going to turn into even more later on. Those are just some tips that we provide from our office sometimes, and we actually have an education savings portal. It's a financial education resource center on, and if you have a need, there's the different categories there. One of the things that we've done with our task force is to go and reach out to various communities to share this message.


Tips for Getting Started With Savings

Christina K. (Host)

That's so awesome. From a perspective of someone watching today, I might think that, okay, you're telling me to save up for an emergency, and that's all well and good. I know I need to have that amount, but it's really hard to start. It's really hard to put money aside on a monthly basis or a weekly or whatever it is, and that is the hard part. So do you have any advice for folks who are just starting out trying to start saving any tips to make it easier?


1. Start Small

Treasurer Kimberly Yee

Yes. Well, first of all, savings is for everyone. It could be at any age. If you're a parent out there, the first thing that I would recommend as a parent of young children is start teaching this early in your home. They could be little ones and you give them a little chore, but it creates the sense of earning money at a young age. Because when you earn your own money, you appreciate it more and so you spend it more responsibly. It doesn't just fall from the sky. That's the first principle is teach those skills at home and make it fun.


2. Save Frequently


Treasurer Kimberly Yee

If you are an adult and you're really struggling, where do you even begin? Or maybe you're already in debt, and you don't even know where to begin. Well, $10, $15, $25, whatever it is, it is actually money to start the process you would need to just start saving small, save frequently. It doesn't have to be every week. I mean, you're starting where you can in any amount.


3. Know Your Spending

Treasurer Kimberly Yee

[When it comes to your budget plan] you know what you spend on every month, and if you don't, then go look at your credit card statement, and there's some consistency there. You're going to know what your average spending is. And if you feel like you're spending more than you make, then that's a problem. You have to start cutting down on what your expenses are. Maybe you need to take a look at not every month of whatever it is. Maybe it's every other month. Those are some things that where you can cut back and start slimming down if you are wanting as naturally, people do wanting to spend more than what they actually have. Also, paying off your debt is very, very important. If you are in a situation in where you were already struggling to pay down what's due, you've got to start paying that down, and you can do it in increments. Just start. The basic thing is just to start. 

Christina K. (Host)

Once you start, it feels good. It feels good to be making progress. It helps us keep going. We have a great resource for folks today - our free Ultimate Budget Plan To Save You Time and Free Your Money. This can help a lot to have somewhere to start.

Treasurer Kimberly Yee

That's right. And from there, there are so many different baby steps that you can look up. There are so many tips online. I mean, our office has these resources on our website, but I am a big fan of Dave Ramsey, and he has these baby steps that actually [start with] just saving up $1000 for your first emergency fund. There's different ways that you can do this, and there's so many different ideas.


4. Reward Yourself

The other thing is, is to certainly make sure you reward yourself. Because when you do this, this is a big deal, and you want to be able to say, if I save X amount more than I normally do, I get to treat myself. Do something to make it rewarding for you as well.

Christina K. (Host)

Because you can't be absolutely perfect on your budget all the time - you'll get burned out. Leaving a little wiggle room sometimes for that reward, I love that. That's such a great tip.

Moving on, you talked a little bit about how setting up different savings goals for different things you want to accomplish, do, or enjoy. The big question that I have heard from so many people is it's hard as a parent to make that decision between saving for retirement and saving for your kid's education.

How do you recommend prioritizing between retirement savings and an education savings plan?

Treasurer Kimberly Yee

I think that you can do both. There are often times where you try to say either one or the other, but it shouldn't have to be. A famous economist once said there are no solutions. There are only trade-offs. Well, I will tell you that there has to be solutions for each family. It's really important not only to save for your retirement but to also have that responsibility of providing those resources for your children's education and that is something that you can do hand in hand.

One of the things that our office does is help families to do just that from the education saving side. In October of 2020, I took over the AZ529 education savings plan. It used to be run in a commission office. Now it's run by my office in the state treasury. In October of last year, we immediately wanted to get this education plan in the hands of so many families who have never gone to college before. Oftentimes, it is such a financial burden that they wouldn't even think of trying for it if they've never had anyone in their family go to college. They wouldn't think they have that opportunity, but they do, and that's the message we've been sending across the state, in every zip code that we can in so many diverse communities and in their own languages (English, Spanish, Navajo.) We have built out this program from a marketing standpoint so that we have now gained just from October last year 11,600 new accounts. That's huge, so those are new accounts, meaning new savings opportunities for families in their higher education.

What's really great is that this is not just your traditional university or community college higher education plan. It's for vocational school, apprenticeship programs. So many vocational programs that we have out there for your non-traditional university setting, and that's the message we want to provide. It also isn't just, let's say you're a parent. It doesn't have to just be for your child. A grandparent can open accounts for their grandchildren and nieces and nephews. You can even open it for yourself. So let's say, especially after COVID, many people have re-looked at their industry that they've been working in, and their careers, and they're refocusing. They want to do something different, maybe more conducive to their family life. And so they are now re-educating themselves in an occupation, in an industry that is new to them, and they have to go back to school. Well guess what, an education 529 account is allowing people to do this for their own educational needs as well. It's never too soon or too late to start. Again, we have a dedicated website for this: You have options there for any type of financial situation you might be in to be able to put that money aside, whether it's $25 a month or much more – whatever fits your financial needs, we have those options for you.


Benefits of AZ529 Plan

Christina K. (Host)

And there are some significant benefits to a 529 Plan, right?

Treasurer Kimberly Yee

Well, there's so many different tax benefits for a 529 Plan. Just from the state of Arizona, you are able to get a tax deduction each year if you have an investment in an AZ529 plan. The deduction will be $2,000, per individual taxpayer, and 4,000 per married couple filing together. Those are some tax benefits to be able to open these accounts. Additionally, you can have, let's say you have a sister or brother. They're the aunt and uncle of your child. They're interested also in a savings account. They can open an AZ529 account from another state. We always get questions - What if your child goes to out of state for college? Can these funds be transferred out of state? Absolutely. As long as it's an accredited higher education institution.

Christina K. (Host)

I love that it includes vocational and technical school. I love that number of 11,000 accounts about over the past year or so. I visualized that as potentially 11,000 more kids going to higher education one day.

Treasurer Kimberly Yee

What I love about it and it really touches me is that so many of these families, they are first-generation higher education families. They never had a child go to college before. But because we've marketed this in a way that's easy to understand that shows the fact that you can only, 15 bucks aside each month really grows over time. And then we've also moved our messaging to nonprofit areas that really work with lower-income families to help them understand the ways out for awesome opportunities. Endless opportunities is to start saving early so that you have the finances available when the time comes for your child, and it's inspiring to see the numbers. We've also brought this to an essay contest. We had a fifth-grader essay contest to show kids in elementary school that they can open up their 529 accounts with their families and win $529 if they win $800. So we had this across the state, 15 counties and so we're just trying to make it fun. Savings should be fun for any age group.

Christina K. (Host)

It really should be, and it can be. We're coming close to the end of our time today, so I really want to make sure that you have a moment. If you had to choose one piece of advice to share with everyone listening today, what would that be?

Treasurer Kimberly Yee

First of all, I want to thank you for the credit union community and all that you do within your communities because it really is amazing and as I shared from my personal experiences. From the very beginning, when a family gets connected to what you do, it really makes a difference because it really is a relationship that you build.
When you build those community relationships with families just right there where you are, you can change their entire lifestyle because one of the things is when you start. You bring them in, have you learned about our [savings account] or whatever it is. This brings them a whole new resource that allows them to save early. It allows them to start budgeting, and it really does. Our mission at the State Treasurer's office is the very same is that getting that financial education awareness out to fit the needs of our unique families in Arizona is all we want to do. Because it really does, in my opinion. As we further educate those to manage their money in a smart way, it affects the overall economy of our state.
It affects our neighborhoods, and how people pay their bills, and we won't see those short sales that we did so many years ago because they couldn't pay their mortgages. All of the things affect each other. I just want to thank you for all that you do. I would love to invite you all to partner with our office. We can go and read Curious George together. He has a book. There's a Curious George book, that how Curious George saves his pennies, and then your hand out one of your goodie bag things that you do right with your logo on it, and you all can send your message of how you can help those schools in those communities as well. We've done that across the state, and we welcome that alongside your community as well.

Christina K. (Host)

I love it. I was a teacher before I worked at a credit union, so it's definitely a topic near and dear to my heart. Here at the Credit Union, we value financial wellness so highly. We're here every month with webinars, online resources, financial calculators, and more.

Now - I am going to open the Question and Answer box so if any Zoom participants have questions for the treasurer, go ahead and send those over. We'll see if anyone has questions specifically for you about the topics that we've covered today.

In the meantime - Obviously, you’re passionate about getting Arizonans fluent in financial literacy. So for credit union employees and members, what can we do? What should we be doing on a daily basis to support this?


Treasurer Kimberly Yee

Well, I think what you all are doing is amazing. My office has this mission of continuing to advance awareness of financial education. We always love the input that we see on the ground. We have a financial Literacy Task Force that meets quarterly. The task force hits multiple areas, not just our K through 12 students in our classrooms. We really want to touch those who are in our veterans and military community, senior citizens who are struggling with a single income budget. We've already worked with the department of economic security and those who might be on government assistance. We've now opened up an option for, as they are preparing their workforce requirements, that they take a financial literacy course as well. So we really want to help so many different communities, and if you have a program or an outreach network that we can partner with, we would love to do that. We welcome any assistance as well as if you want to partner together and go out and speak to groups.



All we want to do is just get the message out that financial education and managing your money in a smart way is the important thing to do from the standpoint of growing our economy and keeping it responsible. Again, I don't have anything specifically other than we welcome that partnership.

Questions & Answers

Q: If I open a 529 for my child, and they don't end up going to college, what will happen to the money in the 529?

A: You have several options if your child's plan for attending post-secondary opportunities changes. You can certainly change the beneficiary to someone else in your family, as the Treasurer mentioned. You can change the beneficiary to yourself, for example, for continuing education expenses. Again, a lot of flexibility there. If you were to withdraw funds in that scenario, if there were no other option then as with a 401k or an IRA, you would have to take the standard tax penalty on that since it would be for a non-educational purpose, but those are the options available.

Q: Can Arizona 529 accounts be used to fund education in another state?

A: Yes. They may use this in any other state, as long as it's an accredited school (there is a list that we would be able to provide). Again, we could even accept out-of-state residence with an AZ529 Plan.


Thank you, everyone, for joining us. We do have a link for you to visit on our website. Just click the button below -  It's just a quick survey about the webinar today, and we did create a free download for you that breaks down savings goals and how to prioritize them between short-term savings, retirement savings, and then education savings. We have links to all of the resources Treasurer Yee mentioned today as well.



Survey | Free Download | Resource Links

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