“Financial literacy” is a buzz phrase that you may have heard. But being financially literate is more than just a trendy concept: it’s something that can help you in all aspects of your financial life. Seventy-eight percent of U.S. adults say they could benefit from financial advice from a professional. The more knowledge you have about your finances and how to navigate them, the more you’ll be able to make sound decisions to effectively save and invest money for yourself and your family. Here are some tips to help increase your financial literacy and make your money work for you.
A first and critical step when managing your money is to take a look at your finances and make a budget. A budget is a great tool to help you figure out what you’re spending your money on every month. If you don’t know how much money is coming in and going out, it can be easy to neglect savings and overspend.
There are a variety of money tools available to help you better navigate your finances and make your life less complicated. Personal finance apps are designed to help you optimize your spending and savings choices each month. When you input all your financial commitments into a money management app, you’ll see your financial choices and habits more clearly. A money tool can help you keep track of your spending, budget and income, organize your expenses, and send you payment reminders.
Knowing your credit score and the impact of good and bad credit is a helpful piece of your financial picture. Whether it’s renting an apartment, buying a car, or getting a loan, your credit rating can affect your ability to purchase or lease items. Each of the three main credit agencies, Equifax, Experian, and TransUnion, lets you check your credit free of charge once a year. Other services, like those offered through your bank, or companies like Credit Karma, regularly update your credit score, let you know who is inquiring about your credit, and offer information and advice on how to improve your rating.
There are so many resources that can help you build confidence in your financial future. In addition to a variety of books available on personal finance topics, many government offices have free resources, like the Federal Financial Literacy and Education Commission, U.S. Securities and Exchange Commission, and the Consumer Financial Protection Bureau.
Online money magazines, journals, and websites are other great resources. They can offer advice for your current situation, give you long-term insight, and help you understand the latest financial trends that may affect your financial planning.
One of the best ways to stay current about money and how it works is to use social media channels to follow financial experts and influencers on Twitter or LinkedIn. A personal finance influencer specializes in sharing tips about finances and money on social media.
Online schools, colleges, and adult education centers offer a variety of classes that teach students the basics of money management – from budgeting to saving, to paying off debt, to investing. Taking a course can help you to build strong money habits that can bolster your financial literacy.
A great way to improve your financial literacy is to meet with a financial professional who can assist you with planning, saving, retirement, paying down your debts, and more. To find a financial professional, submit your information through Midland National’s find an agent page.
National Foundation for Credit Counseling's 2020 Annual Financial Literacy Survey