An Opportune Time to Improve Financial Literacy
Monday, April 16, 2018
A recent survey by GOBankingRates indicates 57 percent of Americans have less than $1000 in savings. Without an adequate buffer of emergency funds, unexpected expenses like car repairs or doctor’s appointments can quickly translate into debt.
April is Financial Literacy Month, a perfect excuse to get a jump start on healthier financial habits, such as budgeting, saving and taking general control of one’s finances for the future.
Many of us were taught how to balance a checkbook in high school. But education about how to manage debt, reduce spending or establish a long-range financial plan is less common.
Financial literacy is a life skill that is critical for everyone to learn, particularly those interested in building wealth or owning a home. We’ve compiled some tips here to help you get started.
Seven tips for taking control of finances
- Assess your financial situation. Take stock of monthly income as well as regular expenses such as rent/mortgage, utilities, health insurance and groceries. Having a clear picture of your income and spending is an important starting point.
- Open a savings account. Aim to save 10-20 percent of your income. Determine what’s feasible for you and treat this savings like a monthly payment. Transfer money from your checking account each pay period. Or simply put $5-10 cash per week into an envelope. You’ll be surprised at how quickly it adds up.
- Develop a budget and stick to it. If you’re always overspending, try paying for everything with cash instead of credit or debit cards.
- Figure out ways to cut spending. Are you regularly eating out for lunch or buying specialty coffee drinks? This quickly adds up. Consider splurging once a week or every other week on such treats.
- Make timely payments to avoid late fees and credit dings. Create a personalized calendar to help remind you when utilities, mortgage/rent or credit card payments are due.
- Pay down your debt. If you have credit cards or loans, pay attention to interest rates. Consider transferring credit card balances to cards with 0 percent interest periods to cut down on costs.
- Track your credit score and review it regularly. Set specific financial goals for yourself. Whether it’s paying down debt, contributing to retirement or saving for a house, long-term aspirations can help keep you on track for a secure financial future.