Did you know that April is Financial Literacy Month? Financial Literacy Month is a national campaign designed to bring more financial education to children and adults. To kick off the month, as an alumnus of Middle Tennessee State University and Financial Advisor in Murfreesboro, TN, we were invited to participate in several on campus activities that encourage financial literacy. We had the opportunity to speak to several classes on the education and value that we offer to our clients through financial planning and investment management services as well as encourage students interested in a career in financial planning. Financial literacy is developed through education and experience, and we find great joy in helping others gain knowledge and confidence on their path to financial success.
Whether you're a financial wiz or just learning the ropes, so many ways exist to improve your financial literacy. Here are four to get you started.
Make a Monthly Budget
One of the most important, yet dreaded, steps in ensuring financial success is creating a monthly budget. This may sound simple, but a budget is your financial strategy's foundation.
Creating a monthly budget doesn't have to be complicated. Here's how to ensure you're setting yourself up for financial success:
- First, 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.
- Speaking of priorities, consider your financial priorities and 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.
- Finally, create expense categories for where your money is spent and 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 it's been a while since you checked your credit score, now is a great time to see where you stand. Your credit score is an important metric when considering your financial health and will play a larger role when you apply for loans, especially mortgages and car loans. If you have a higher credit score, you may qualify for lower-interest debt, which will save you money.
Reviewing your credit report is important to ensure there aren't any mistakes or incorrect accounts assigned to you. If you notice something on your credit report that doesn't look accurate, such as a loan or credit card you don't remember opening, contact your financial institutions immediately. You can also file a dispute with the credit reporting agencies to report any false information you find.
Understand Your Investment Options
As you become more financially literate and feel comfortable talking about finances, you may consider looking into investments to help you accomplish some of your long-term goals. With so much information available to us at our fingertips, working with a financial advisor can help you understand your options and simplify the process. It's important for the investment selections to align with your time frame, risk profile, and goals. This is where the education and experience of a professional may be most valuable.
Don’t Be Afraid to Ask Questions
Talking about finances can be intimidating, but we all must start somewhere. This Financial Literacy Month, make it a goal to learn one or two new facts about finance and contact us to help. You can turn to financial advisors and financial publications to get your questions answered without feeling naive or silly. We get the opportunity to serve clients from various backgrounds and walks of life. We enjoy educating clients and seeing life's goals come to fruition.
Financial literacy doesn't come from making big leaps but rather from taking one step at a time. Contact us today to get started!
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.