April: National Financial Literacy Month
Partners is excited to celebrate National Financial Literacy month. This month, in an effort to continue to offer financial education tips and resources we will be offering a variety live-webinars and on-demand content. This month, we will also bring you a variety of financial education blogs, consisting of a variety of tips to help you no matter what your financial journey may be. Whether you’re trying to minimize debt, planning for upcoming college expenses, or maybe you’re returning to work and need to reevaluate your budget, we’ll provide you with tips to help you manage your finances safely, securely, and more! To kick us off, let’s start with reviewing your finances.
Start by figuring out where you are financially. One of the first steps in helping you determine where you are financially, is going to consist of knowing your budget. Many of you might remember we talked about this earlier this year, and we don’t want to sound like a broken record, but we promise starting here will help you determine what moves you need to make to keep you on track to meet whatever your financial goals may be. Creating your budget and determining your cash flow can be as easy as 1,2,3.
- Calculate your income – Make sure you include your regular salary and any additional income such as bonuses, overtime pay, income from side hustles, etc.
- Determine your expenses – This will consist of fixed expenses, such as rent/mortgage, insurance, monthly subscriptions, payments on loans, etc. You also want to review your variable expenses, such as groceries, gas, utilities, and any other miscellaneous expenses.
- Review your income and expenses – Calculating your income and expenses will help you determine your cash flow. Ideally, you want to have funds left over after subtracting your expenses from your monthly income. If you are “in the negative” this may require you to review your expenses to help get you “back in the green” and headed towards a more secure financial future. This may not be the most thrilling of tasks, but it will help put into to perspective money opportunities that you’ve potentially overlooked or haven’t thought of and most importantly help you identify what changes can help get you where you want to be.
Determine where you want to be financially: I know this may sound easier said than done but figuring out where you are and knowing where you want to be can help influence your financial decisions of today into the financial future of tomorrow. Do you want to save more? Do you want to pay off debt? Do you want to buy your dream home? Maybe you want to start saving for retirement (or increase your retirement contributions). No matter what your goals may be, know that you aren’t alone in getting there. We encourage you to leverage financial resources to help get you there. Here are Partners, in addition to our financial education webinars, we offer financial calculators, consolidation loan options to help you lower debt, college savings plans for your children, and much more!
Don’t forget about your credit: Another key factor that will influence your overall financial picture is yes, dare I say… your credit. Managing your debt, staying on top of your loan payments, while also limiting your credit use and your credit inquiries are all things that will impact your credit score. Here are a few steps you can start (or continue) to follow to ensure you are staying in control of your credit.
- Limit your credit card use: If you are using credit cards, try not to go above 50% of your limit. This will help your credit utilization, which will positively impact your credit score and make it easier for you to get (or stay) within the credit range you’re looking for. As a reminder, a “good” score is going to be anything above a 680, so as much as we all may want to get to that 800-credit score range, don’t put so much pressure on yourself and work towards that “good” range first.
- Pay your debts on time: Making on time payments (I know sometimes easier said than done), is going to be extremely important. If you catch yourself potentially falling behind, give your lender a call to see how they can help. Missed payments will highly impact your credit score for the first two years from that last late payment, so if you’re planning on making any big purchases any time soon, it may come back to haunt you for longer than you expected.
- Limit applying for credit: As our economy starts to stabilize and folks start returning back to work, purchasing power also goes up, which is a perfect time to be tempted to apply for credit, but remember, every time you apply for credit you are lowering your credit score. Credit score inquiries also stay on your credit for approximately eighteen months, so my motto when it comes to that is “if you don’t need it.. don’t do it”.
Take the wins: As stressful as the concept of managing your finances might be, remember to take the wins and celebrate your successes throughout your journey. This is important as it will not only keep you motivated, but it is also, and most importantly set you up success for the future. We hope the tips we have provided will help you feel more in control of your finances so you can enjoy yourself, make plans for the future, and have confidence in making future financial choices.
Stay tuned for more tips to come this month. To access more financial education resources, visit our Financial Education page today!