Many of us don’t know as much about managing our personal finances as we would like to. And it’s usually during times of crisis, change, or stress, that good money management skills (or lack thereof) tend to become top of mind.
April marks National Financial Literacy Month. At TFNB, we’re here to help you learn more about how you can manage your money and practice financial better habits to help you reach your goals wherever you’re at on your journey. To celebrate, we’re sharing our top seven money skills that will help you become more financially savvy this month (and for all the years to come).
1. Get Educated
It’s never a bad idea to start honing your financial skills. Interested in learning more about credit, 401ks, or financial caregiving? We cover all of these topics and more in our free Financial EDGE Academy. Each of our modules features bite-sized trainings that cover a variety of topics. Within minutes, you’ll gain valuable insights and skills.
2. Start Budgeting, If You Aren't Already
It’s one thing to learn how to add and subtract in elementary school, but it’s something else entirely to actually apply those principles to your own finances. Most Americans live paycheck to paycheck, and it’s largely because of a gap between what the math says they can afford and what they actually spend. If you don’t have a budget in place, start putting one together to keep better tabs on your spending habits. While it may not seem like the most thrilling task, learning how to budget can help you reach your goals and obtain peace of mind, both today and in the future.
3. Check Your Credit Score
Your credit score is an important factor in getting the financing you need to buy a house, get a credit card or take out a loan. Checking your credit score helps you get an overall picture of your current financial situation. Plus, monitoring your score can also help you catch identity thieves or errors before they affect your credit. Luckily, you get access to your credit score from each major credit bureau once per year without a fee.
4. Pay Down Debt
Carrying debt can hold you back from reaching your financial goals. It could also potentially hurt your credit score, making it more difficult to get the credit you need to buy a car or obtain a mortgage.
One of the most common strategies to paying down debt is the snowball method. You start by paying off your smallest debt. Then, once it’s paid off, you roll the money you were paying on that debt into the next smallest debt and you continue paying off your lowest debt until all of it is gone. Don’t forget to make sure that you’ve budgeted enough to cover the minimum monthly payments for every debt, so you don’t face penalties or late fees.
5. Build A Rainy Day Fund
Do you have enough cash to get you through a job loss? What about if an unexpected bill pops up? Having emergency savings can help you pay for sudden expenses or cover living costs if you lose your source of income or have to take a pay cut.
A good rule of thumb is to have at least three to six months of living expenses saved up. Remember, these funds are for emergencies only. Sometimes when people want to splurge, they are tempted to borrow from their emergency savings. But, that shopping spree or vacation won’t be as satisfying if you suddenly lose your job later down the line. So, commit to building your rainy day fund, rather than taking from it and you’ll have peace of mind when the unexpected happens.
6. Start Contributing Towards Your Retirement
Whether you’re 18 or 38, it’s never too early to start planning for retirement. In fact, the earlier the better. When you have a financial plan that includes a smart retirement investment, you can face the future with hope knowing you’ll have funds to get you through your golden years. Consider using good growth stock mutual funds in a tax-advantaged retirement savings plan, like a 401(k) or Roth IRA. Trust us, your future self will thank you.
7. Know Where To Get Help
Learning financial skills isn’t always easy on your own, and knowing where and when to get help can make a big difference.
In addition to trusted family and friends, having a strong relationship with a banker or financial advisor, can build your network of support. Whether you want to stop by to chat about opening a bank account, want to create a retirement investment plan or just need advice, the friendly team members at TFNB are here to help. Visit one of our locations, and we’ll get you started on your path toward financial confidence. That’s why we’re your bank for life.
Contact us if you have any questions or would like to know more about our banking solutions.
