April is National Financial Literacy month. While it’s wise to think about your finances year-round, we thought this would be an appropriate time to help you brush up your skills and expand your knowledge.
It’s also an opportunity to take a close look at your financial situation. If you’re like many Americans, your finances may be running on autopilot. You don’t think much beyond your day-to-day needs until a financial emergency, like a job loss, home repair or medical condition lands you in a tight spot.
By taking some simple steps now, you can avoid that nightmare and gain confidence in your financial future. Equipped with more knowledge and a better understanding of your options, you can make more informed decisions about all aspects of your finances.
Here are our best tips to help you improve your financial literacy this month.
Review Your Long-Term Financial Plan
What are your goals for the future? Where do you stand with saving for retirement? For your kids’ college education? For that Caribbean vacation you’ve been dreaming about?
When you write down and plan for your goals, you make them more attainable. When your goals change because of a divorce, the birth of a child or other significant life events, you can track those as well and adjust your financial planning accordingly.
Find Creative Ways to Jump-Start Your Savings
Challenge yourself to a “no-spend” month where you avoid all unnecessary expenses or try going 30 days on “all-cash diet.” At the end of a month, you’ll have instilled better habits—not to mention self-discipline—and have a clearer picture of just how much you spend on wants versus needs. Then you can evaluate how to keep your spending in check to meet your bigger financial goals.
Check Your Credit
Keeping tabs on your credit is important. Your credit score tells you roughly how much it costs you to borrow money for big purchases, like a home or a car. The lower the score, the higher you’ll pay in interest rates and other unfavorable terms.
By reviewing your credit report, you can also monitor for identify theft. You’re entitled to a free credit report every year.
Teach Your Kids Financial Responsibility
Give them age-appropriate opportunities to manage money. Help them set up a budget and when your kids make mistakes—who doesn’t?—turn those missteps into learning experiences. They’re more likely to grasp financial realities through trial and error, even if that means some painful life lessons. Better to help them learn now than when they’re in the real world on their own.
Finally, Stay Accountable
Enlist a trusted professional like a financial advisor to help you build a solid plan. If you’re married, make financial literacy a joint effort. And remember that finances don’t exist in a vacuum.
Your financial plan should reflect your values, goals and dreams. It should be tailored to fit your unique circumstances. It should be something you feel good about, both now and for the long term.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Wealth Enhancement Group is a Greater Minneapolis-based independent wealth management firm offering comprehensive and customized financial planning and investment management services. Established in 1997, Wealth Enhancement Group uses a team approach with a focus on simplifying their clients’ financial lives and has offices nationwide.