April is known for its “April Showers,” taxes, pranks, and Easter eggs.
But did you know that the month of April is also associated with financial empowerment? In fact, the US Senate passed a motion that made April the National Financial Literacy Month back in 2004, dedicated to helping the American consumer make the most of his/her money and attain overall financial wellness.
As consumer debt in the United States continues to rise, more and more people are finding themselves without any extra cash to spend. It’s high time that Americans learned how to establish and maintain healthy financial habits. With Financial Literacy Month in effect, we want to take the next 30 days to challenge you to a financial wellness transformation. By April 30th, we want you to be well on your way to being financially literate and more confident in the financial choices you make.
Over the next 4 weeks, challenge yourself to take another step into financial wellness. With a focus on credit, budgeting, and outgoing expenses, you can break down and rework your current financial standing to better align with where you are how and where you want to be in the future.
Week 1: Analyze Credit Card Statements
The credit card statement may be the most boring document to read through, but it’s imperative that you know and understand the information that it contains. Review this document every month and pay attention to the following sections:
- Interest charges: Contains interest charge calculation for the billing period.
- New charges: Lists all the times you have purchased during the period.
- Rewards summary: Some credit cards have a rewards program. Review this section to understand how it works.
- Account summary: This section explains how you got to your current balance.
- Payment information: Here, you will find your account balance, minimum payment, and due date.
Look at all these sections closely to ensure that your credit card is working for you. Check and double check to make sure there are no erroneous charges, verifying each purchase listed on the statement. By carefully analyzing your credit card statement, you can better understand how your card is either helping or harming your financial situation, and begin to research a better solution.
Week 2: Track Your Expenses
- Tracking your expenses will help you understand how much you spend and on what. You can use this information to cut unnecessary spending and keep yourself on budget. This will help increase your savings and learn how to manage your personal finances more efficiently. Keep track of your natural spending for the week.
- Create two categories; one for essential items or unavoidable costs like basic needs, and discretionary spending.
- Examine your lists carefully decide on which items you can go without (or purchase less frequently).
You may be surprised at how cutting small reoccurring purchases out from your day-to-day can change your financial standing. Instead of spending $5 a day (or $100 a month) on drive-thru coffee, invest in a coffeemaker or press, and put the rest of the difference toward your credit card. In an additional $75 per month can help pay down your balance and help improve your credit score, it can be easier to see how small changes can have a larger impact.
Week 3: Clean Up Your Budget
Many American consumers don’t have a budget, and even if they do, they are not keen on following it. You’ve taken time in the past two weeks to really understand where your money is going. This is great information to have when creating a budget (that you’ll stick to!). If you already have one, review and make the necessary adjustments.
Week 4: Pay Your Bills on Time
Don’t avoid your bills. Ignoring bills is one of the most common causes of financial problems among American consumers. The fourth week of the month coincides with the end of the month, and that’s usually the period when utilities, creditors, etc. come to collect their dues. Not settling your bills immediately can wreak havoc on your credit score and bottom line. There’s a lot that you can do to reposition your financial standing by using exactly what you have. Gather the due dates of all recurring bills and set digital reminders to pay them—that way you won’t have to worry about accidentally forgetting what bill is due when.
Through this month you can find gaps in expenses, chances to save, and opportunities to get more from your efforts. But, don’t stop reviewing your budget and goals when the month ends. Continuing to build your financial knowledge will allow you to grow into being financially literate and get better at managing your finances with ease.