15 Tips for Financial Literacy Month

Americans have a greater need to educate themselves about how to effectively manage their finances because many employers are eliminating retirement plans and offering 401K’s, 457 or 403b as an alternative. Social Security may not be available for those who are in their 50s or younger. Those who are unemployed, underemployed or retired also need adequate skills to properly manage their finances. In addition, financial products and services are more complex and perplexing. April is Financial Literacy Month that stresses the importance of financial literacy.

Without adequate knowledge about basic financial literacy concepts, consumers can make devastating financial mistakes that can take years to recover. Regularly practicing good money management habits eliminate the needs for dependency on credit cards, payday loans or title loans and cash advances.

The financial stability of families is directly linked to economic growth in America. The economy is stronger when more Americans have jobs, increases in income and an accumulation of wealth.

Financially strong families tend to have better money management skills and are more willing to make major purchases that help advance our economy. Financially successful people save more and are more able to get approval for credit cards and loans.

The average American believes all they need to do is go to work everyday and pay their bills on time. However, being a responsible consumer requires much more. Consumers need to be able to make informed decisions about how to earn, spend and grow their money.

This is where the importance of financial literacy plays a key role. The lack of financial literacy education and effective money management skills result in mounds of debt, low credit scores, denial for approval of credit and loans, increased foreclosures and bankruptcies. These factors ultimately slow economic growth.

Financial literacy increases the awareness of the benefits and risks of consumer credit and the consequences of poor money management skills. Financial literacy benefits include: accumulating wealth, planning for retirement, planning for children’s college education, starting a business, ability to make large purchases, maintain good credit and achieve financial goals. Financially literate consumers help the banking industry by purchasing products and services which results in stable banks, better customer service, lower fees, and increases in money available for lending.

The primary benefit of financial literacy is providing an improved standard of living for students, individuals and families.  Financial literacy helps individuals and families accumulate wealth and live a financially stable life. Families are also able to pass knowledge on to their children and future generations.

This month make at least one change to your spending habits to help pay down debt, create a savings account or start planning for your retirement. Make a promise to yourself and your family that starting in April you will do at least one of the following to improve your financial life.

1. Create a budget or spending plan and track spending daily, weekly or monthly.
2. Pay bills on time or before the due date.
3. Verify financial statements each month.
4. Create an emergency fund to cover bills and monthly expenses for 9-12 months.
5. Get current on any late bills by negotiating with creditors or setup payment plans.
6. Reduce monthly spending by 30-50%.
7. Buy more of items you need instead of items you want.
8. Use credit cards for emergencies only.
9. Do not buy something if you do not have the cash to pay for it.
10. Order a copy of your credit report and dispute any errors.
11. Avoid using risky options such as payday loans, cash advance or title loans.
12. Get overdraft protection to reduce bounced check fees and find banks with little to no monthly fees.
13. Pay off at least one credit card this year.
14. Plan for your future by performing estate planning.
15. Avoid filing for bankruptcy.