According to the National Financial Educators Council, April has been designated as Financial Literacy Month in the U.S. since 2003. The purpose of this recognition is to highlight the importance of gaining practical money management skills and to support systems for “teaching Americans how to establish and maintain positive, healthy financial habits.” That makes April an ideal time to reflect on your personal finances and create a plan to make necessary adjustments to ensure your financial wellness Here are some practical tips:
5 Ways to Take Charge of Your Finances
- Know Your True Financial Situation
- Take a good look at your assets and your debts to know where you stand.
- Set Your Financial Goals
- Set goals related to your financial priorities. These goals could include:
— A plan to manage and reduce debt;
— A long-term savings strategy – for future savings and planning;
— Planning for a large purchase, like a house, vehicle, or birth of a child; or
— Planning for short term purchases, like dinner out or a vacation.
- Set goals related to your financial priorities. These goals could include:
- Make a Budget
- Make it a habit to budget each month.
- Start with your recurring expenses like utilities, food, and transportation.
- Add in fluctuating expenses like entertainment.
- Add in a monthly budget for annual expenses, like property taxes and insurance.
- Pay Yourself First
- The most pain free way to save is to contribute to a retirement account and make your savings the first expense that you budget every month.
- Build an emergency fund to support yourself through 3 to 6 months of expenses should you lose your primary form of income.
- Be Careful with Credit
- Do not use a credit card unless you can pay it off every month.
- Using credit for large purchases may make sense if you can use a credit card with a 0% introductory APR and pay it off within the interest-free period.
