April is National Financial Literacy Month!
Financial Literacy is the ability to understand how money works in the world. This can include:
How someone earns or makes it
How a person manages it
How a person invests it
How a person donates it to help others
Financial Literacy has an impact on a persons ability to make smart decisions about which institute of higher education they may wish to attend (whether it is college or a trade school), what they might like to study, how they can potentially pay for the education they wish to acquire, and how to manage student loan debt after graduation (if they happen to use any loans). It also has an impact on a person's ability to build for the future, get a house to make a home, a car they may want, or even a business.
I believe everyone should be financially fit because unexpected things happen through no fault of our own and we do not want to stretch ourselves too thin in order to get things paid if we do not have to.
Here are a few questions to test your financial fitness:
Do you know where you stand financially?
Do you follow a budget?
Do you have an emergency fund?
Do you have a long-term financial plan?
Have you reviewed your credit score?
Be honest with yourself because these things can always be changed, improved, or started. If you have answered yes to any or all of these questions, that is amazing! We can build upon what we started. If you were unable to answer yes to these questions we are going to create the foundation to which we can build to greatness. Here are some ways you can work to be financially fit:
Start an emergency fund. This does not need to start off as a 3-6 month buffer in case the unexpected happens, especially if you do not have it. A good starting point would be $1000. If you have it to move now that is great, if not build it up slowly to what you can.
Get rid of your debt. One method that has worked for me is the debt snowball. You can start with a small debt like a lower credit card bill and pay it off first, then the money you would have used on it goes to pay off the next debt until all are paid off.
Check your credit score. Did you know you can check your credit score for free once a year directly from the credit bureaus? Check your reports and address any errors you find directly to them.
Set up automatic savings accounts. A good way to save for college, a home, a new car, or additional money for your emergency fund is to set up automatic deposits for a savings account. This can be $5 a month to get you started and is something you can set and forget. An app I use is Digit.
Budget! If you do nothing else, start a budget so that you know where your money is coming from and where it is going. You can find templates in Microsoft Word and Excel. You can also use apps like Clarity Money and Mint.
If you are interested in using any of the apps I mentioned, here are their referral links:
Beginner Investing: Acorns- Get $5 when you use my invite link:https://acorns.com/invite/8FHTTY
Additional Savings: Digit- digit.co/r/Z1E_YlubtH?aw
Budgeting: Clarity Money- https://link.clarity.com/HJejFQMfOI
Finances are a huge part of life. Set something up now to help yourself in the future. See you next time!
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