What Financial Literacy Means [Top 4 Tips]
|By Sarah Carlson, CFP®, CLU®, ChFC®|
April is Financial Literacy Month. Let’s explore what financial literacy means for adults and children in this national campaign designed to present financial education.
There are many ways to improve your financial literacy. Let’s examine these top 4 tips on what financial literacy means for you.
Your Money Mindset
It’s common to have fears when it comes to discussing money. However, shifting your mindset around money and conquering your fears is an important first step to get started.
Know that money is a tool and you can control it. As a Spokane financial advisor, I’ve seen many people go from financial fear to financial clarity.
Make it a goal to learn about finance. You can turn to us to have all of your financial questions answered. Financial literacy is for everyone and your questions and concerns matter.
Creating a Monthly Budget
A great and straightforward foundation for your financial strategy is a budget. These steps are the backbone of ensuring financial success. In addition, it will quickly teach you what financial literacy means.
A few quick steps:
- Calculate your gross monthly income. This could include your salary, investment income, Social Security, child support/alimony, freelance work, or other income sources. Remember to calculate your net income as well, which is how much is left after taxes and other deductions.
- What are your financial priorities? Allocate your budget accordingly. In addition to your regular monthly expenses, you might decide to increase your general savings or earmark money toward a large purchase such as a home or car. The important point is to decide what's important and to make sure your budget reflects those values.
- Create expense categories. This is where you track each and every expense. It's important to differentiate between wants and needs. You need to pay the rent or mortgage payment, but you want a new pair of shoes or a nice dinner out. By tracking your spending, you can determine whether your budget is aligned with your priorities or if you should make adjustments to meet your goals.
Check Your Credit Score
If you haven’t checked your credit score in quite some time, you can check your credit for free.
Your financial health is determined by your credit score. If you have a high credit score, you can save money in the long term by qualifying for lower-interest debt. A few benefits of having a great score are:
- Higher approval chances for credit cards and loans
- Lower interest rates on credit cards and loans
- More housing options
- Getting better car insurance rates
It’s also good practice to look for any inquiries that you don’t recognize. Take action and file a dispute immediately if you’t recognize anything on your report.
Know Your Investment Options
After becoming more financially literate, consider looking into investments that are aligned with your goals. There are many different types of investments and working with us can help you understand your options. Also, take time to educate yourself on the most common investment types such as:
Financial literacy doesn’t have to be intimidating. Taking small steps will draw you closer to becoming more financially literate and toward your financial goals. We’re here to help you overcome any adversity that’s preventing you from reaching your financial goals.
Schedule Your Free Consultation Today
If you need any assistance with building a comprehensive financial plan so you can focus on building your ideal lifestyle, schedule a free call with us today.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.
All investing involves risk including loss of principal. No strategy assures success or protects against loss.