Understanding one's income is important to safeguarding a future, James Tatum III told Eastern Michigan University students at the Honor College during the latest Star Lecture.
The presentation, titled “Financial Wellness: What you should know,” was held as part of the EMU Honors College Star Lecture series, and fit into this year's theme of centering wellness. The lecture was held on Thursday, Jan. 16, 2025.
The next Star Lecture is scheduled for Feb. 19, with EMU English professor Lolita Cummings and Melissa Thrasher, the university's executive director of media relations and social media. Together, Cummings and Thrasher host a video podcast called Enlighten U.
Tatum, who graduated from EMU in 2014, is the director of financial planning and analysis at the Wayne County Department of Management and Budget. He monitors the income of the county, including the amount Wayne County earns from property taxes, and reviews major project cost estimates. His job is to help the county make financial decisions based on the money it has, and what it will get in terms of income.
James Tatum is a 2014 graduate of Eastern Michigan University and a guest speaker in the Honors College Star Lecture Series. (Courtesy of EMU)
“Money is much of the reason that I’m successful,” Tatum said. “Not because I have a lot, but because I understand it. When you understand money, you understand so much.”
Tatum was a political science student at Eastern Michigan University and a news and opinion writer for The Eastern Echo. At first, he said, he wanted to become a journalist, but that changed when he became interested in local economic development and knowing how something worked while helping others.
“I really wanted to understand how an idea becomes reality,” Tatum said. “I always wanted to be a designer of ditches, and a digger of ditches, and finance was a way to understand both.”
He said the key points to finance are income, debt, and cash. The first step in managing money is creating a budget. A budget should account for gross income, disposable income after taxes are paid, and discretionary income, including bills and things of value. Tatum said budgeting isn’t allowing income to the last penny, but budgeting matters so you can care for yourself in the future.
Playing Monopoly is an early introduction to how people understand finance relating to bankruptcy, income, assets, expenses, and liabilities, Tatum told the Star Series audience. About 15 members of the audience said they had played Monopoly, although the 55 people attending the lecture on Zoom couldn’t answer.
“Debt is our money borrowed on this premise,” Tatum said. “Debt is bringing future income into the present. When you borrow money, it is the premise that at some point in the future, I will have this amount. I don’t have it, but I need it now.”
Tatum pointed to home purchases: When people buy houses they are borrowing. Some people don’t have the money now but at some point, they will have the money.
“Think about your income, and when you think about your debt, also think of it in the context of what you earn and what you’re likely to earn in the future,” Tatum said.
Tatum said it's important to keep extra money for exigent circumstances. Have cash set aside, whether it’s kept in a bank account or stashed under the mattress, he said, adding that he doesn't necessarily advise the latter. That advice prompted laughter from his audience.
Checking credit scores is also important, he said, explaining that anyone can check their credit once a year for free through a website called AnnualCreditReport.com. The website is jointly operated by three major credit reporting agencies, Equifax, Experion, and TransUnion. The free report availability is mandated by federal law. Two federal government websites, investor.gov from the U.S. Securities and Exchange Commission and the pages managed by the U.S. Consumer Financial Protection Bureau, both offer information for consumers to ensure they can obtain those reports at no charge and aren't scammed.
Tatum said the first thing to do when reviewing a credit report is to ensure there are no inaccuracies.
“If there’s a loan outstanding for a Porsche, I don’t drive one,” Tatum said, and the audience laughed. “If there are inaccuracies, there’s a way to correspond with the credit bureaus to have it corrected, and you want to get it corrected.”
Paying payments on time builds a credit score and as a result, credit bureaus recognize and give positive ratings to credit-worthy borrowers. Altogether, Tatum said students shouldn't make themselves slaves to their credit score. However, he said, meeting with a financial advisor helps to keep students on the right track if they've taken out student loans.
A program called Public Sector Loan Forgiveness, available to public sector employees such as teachers, allows for loan forgiveness at the end of 10 years for those who make payments on time.
Students in K-12 don’t retain much of the information they learn about money because they aren’t applying their knowledge soon enough, Tatum said. Then when the time does come it has slipped from their memory. The most important time to learn about money is when entering and leaving college, he said, because most students are taking out student loans and will have to repay them.
When paying for school, it’s notable to know what you owe so that your income can adjust to how much your student loan payments will be, Tatum said. If planning to go to graduate school, look at the cost of living before applying. Know how much the rent will be, and if the tuition, and scholarships offered will cover those costs.
“Let’s say you attend New York University. There’s not just the price of the tuition. It’s to live in New York City. That’s the real cost of your education,” Tatum said.
Many people don’t know that scholarship offers can be countered by writing to an institution, Tatum said. He discovered this from Arnold Fleischmann, who in 2009 was head of the Political Science Department at EMU. With this information, Tatum wrote a letter to Syracuse University, in New York State, saying that he was interested but also had another offer. He said he was from a middle-class household and asked if Syracuse could lighten the financial burden when attending their university. Because of the letter he wrote, Syracuse gave him more money, therefore he owed less.
Instructors will do a lot to make sure you succeed, Tatum said. If you don’t receive an offer from a school, reconsider that school.
“If they haven’t offered you money, they don’t want you that bad, in my mind anyway,” Tatum said. “Leave with as little debt as you possibly can. Debt constrains your choices.”
Just like a scholarship, students can counter a job offer too. Tatum said he gives this advice frequently to friends and has yet to be told they don’t receive a little more. He found out about countering his job offers from his aunt who works in human resources.
“The first big boy job, that’s what I call it, retirement plan and health insurance. I countered my job offer,” Tatum said. “They offered me 57. I asked for 63. If I remember correctly, I got 61.”
When countering a job, Tatum recommended that students be respectful, informed, and confident, while also thinking that they aren’t being greedy. After all, it’s a fair exchange so don't feel bad, Tatum said.
“If you countered your job offer and an employer rescinds their offer,” Tatum said, “you didn’t want to work for that employer in the first place.”
The Pew Research Center found that 60% of people don’t counteroffer when taking on a new job. Advocating for yourself is important because the workplace won’t advocate for you, Tatum said.
Those go for seeking raises too. However, Tatum said, an employee must be able to justify getting a raise, such as talking about skills. Still, Tatum said, leaving a job and going to another might be the best way to get a raise. However, he said, he isn’t giving the OK to quit a job for a raise.
The government has set up ways where you can avoid taxes and in return build better retirement and health expenses. In this way, workers have an advantage because they are avoiding taxes, not evading. This doesn’t mean you aren’t paying taxes, Tatum said. The audience laughed when he said he wasn’t telling them to not pay taxes.
“Don’t pay more to Uncle Sam than you have to,” Tatum said. “Pay Uncle Sam what you owe, but don’t owe more than you have to. The wealthy people in the world are taking advantage of this and you may as well.”
Knowing tax codes like 401(k), IRA, HRA, HSA, 457(b), etc. can help. When people are confronted with these options of where they want some of their money to go for retirement and taxes they often ignore or submit to the default options. Tatum said people should talk to a financial advisor or tax company. Paying student loans before withholding money for retirement is worth taking into consideration, too, Tatum said, because being without debt provides more options.
“When you are young you should take risks, but you should account for that risk," Tatum said. "You should make sure if you fall it’s not too hard."
Growing up, Tatum was a big saver. His dad said he could get certain things but not everything. Tatum was presented early with the mindset that he could save it for later when he wanted something.
Tatum said people should know basic math to be financially literate, and when you combine that with your priorities and habits, you should be able to catch on.
One financial risk appears in the form of social media, Tatum said, when people see lives they perceive are better than theirs. What people see online makes them tend to fear they’re missing out on something and makes them tap into scams in schemes, Tatum said. In a slideshow accompanying his presentation, Tatum showed a picture of the Four Horsemen of the Apocalypse. In place of the men’s head in the photo, he put company logos of Robinhood, Fanduel, DraftKings Fantasy Sports, and Coinbase.
Before thinking about putting money into bitcoin, cryptocurrency, or gambling, it’s important that you have cash in your bank and retirement accounts, Tatum said, because they are companies out to take money from your pocket.
One thing that Tatum said he wanted the audience to take away from his presentation was to avoid the mistakes that harm the typical American household. He also wanted to provide the audience with peace of mind about their financial situation while also having a handle on it, which reflects to this year's Star lecture theme, centering wellness, Tatum said.
“So much of my life has been sheer dumb luck,” Tatum said. “But in the area where I’ve done well, I’ve been somewhat savvy with money, and it’s freed me to do so much. So, I want to return the favor.”
Find more Star Lecture Series information on the Honors College pages of the university's website.
