Happy April - or should I say Happy Financial Literacy Month!
We have learned a lot over the past couple of years that will pay off for years to come. The pandemic has allowed us to slow down in this ever-changing world and appreciate what truly matters; family, friends, and the connections we’ve made throughout our lives.
Among other things, the pandemic has taught us that we had better look closely at our financial habits and reflect on our financial situations, and April is a good time to do just that.
National Financial Literacy Month is a sanctioned government event that started in 2004 with the Senate passing Resolution 316 to raise public awareness about the importance of personal financial education in the United States and the serious consequences that may result from a lack of understanding about personal finances.
If you want more from your money, then participate in National Financial Literacy Month by committing to complete the following during April:
Decide that you want to develop and follow a financial plan. To become financially empowered, you must be passionate, energized, and focused on making it happen. Examine your attitude about money and identify at least one benefit you hope to gain by changing how you manage your finances.
Read books. As the saying goes, "Knowledge Is Power." There is a plethora of books available on the subject of personal finance. Start your financial library by visiting your favorite online retailer to order a paperback, hardcopy, or eBook. By reading financial books, you will understand how to manage your money better and learn about the areas you need to improve your spending.
Get copies of your credit report. You can check your credit report for free within a few minutes by going to www.annualcreditreport.com. You're entitled to one free copy of your report every year from each of the three credit bureaus: Equifax, Experian, and TransUnion. Check your credit regularly and dispute any errors by contacting the credit reporting agencies directly.
Identify and document your spending. Write down or use a budgeting app or software to record your fixed expenses. Some examples of fixed expenses are your car payment and mortgage or rent payments, which do not vary from month to month. Also, it's essential to note your variable and periodic expenses such as food and groceries or your auto registration fees that are not paid every month. Once you get in the habit of documenting your expenses, you should have a good idea of where your money is going, which will help you identify the areas you need to focus on to reduce your spending.
Build up your emergency and retirement savings funds. According to a Federal Reserve report, nearly 4 in 10 households did not have the cash on hand to cover an unexpected $400 expense before the pandemic. It would help if you had some money set aside to cover the unexpected things in life. Directing a percentage of your income from your tax refund, pay raise, bonus, a cost-of-living adjustment, or extra income from a part-time job or side gig can contribute to growing your emergency savings fund and can help you reach your goal sooner. Also, start ramping up your contributions to your 401(k), contribute at least enough to get any company match. If you can do so, contribute 15% or more of your paycheck to your 401(k) or other retirement accounts such as an IRA.
April is a good reminder that financial literacy is an ongoing process, and anyone can become financially equipped. Our spending and managing of our finances have been greatly affected due to the pandemic. Taking responsibility for what's happening in your life is one of the most empowering things you can do.
Keep The Faith,
Livia
aka Livia Kelly (Author)
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Livia Kelly is the Author of Unmarried and Debt-Free. Livia's book has made Amazon's #1 Best Seller list in Personal Budgeting and Two-Hour Self-Help Short Reads. Her goal is to simplify finance by providing sound and useful guidance about achieving financial success on your own. More information can be found at https://www.liviakellyauthor.com. Follow Livia on Facebook and Instagram @liviakellyauthor.
📸 Credits: Tim Mossholder / Nicole Tyler