Coming out of a year like no other, Financial Literacy Month is a chance to focus on the state of your personal finances and an opportunity to improve those finances, one step at a time. This month is designed to help you identify your money weaknesses and turn them into strengths. Here are a few key financial considerations:
- Set your financial priorities. What are you saving for… college education, a home, paying down debt, emergency fund, your retirement?
- Pay yourself first. Create a regular savings plan. Set up direct deposit from your paycheck to a savings account. We rarely miss what we don’t see. Aim to save at least 3 to 6 months worth of living expenses in the event of an emergency (2020 taught us all about the importance of that).
- Set attainable goals. It’s important to set short-, mid- and long-term goals. Short-term goals can be accomplished within two years; mid-term goals within two to five years; and long-term goals in more than five years. Make sure your goals are realistic and flexible. If you set your goals too high, frustration may keep you from reaching them.
- Follow your money. For most people, financial health doesn’t depend on how much we earn, but how much we spend. Identify and document your fixed monthly expenses (mortgage/rent, car payment, utilities, credit cards). Identify and plan for seasonal expenses as well (holidays, tax debts, auto registration, vacations, annual memberships).
- Identify ways to change spending. Once you have documented where your money goes, you can identify ways to change your spending habits and find savings opportunities.
- Check your credit report. Spot identity theft early and review your credit report at least annually. Most banks and credit card companies provide easy access to your credit report or you can get a free copy each year from www.annualcreditreport.com.
- We are here to help. Be sure to sign up for a review with Greenleaf Trust whenever we visit your company. Don’t forget we are available virtually or by phone. Email us at participant@greenleaftrust.com or call 866.553.8400 to set up an appointment.
Financial literacy is having the skills and tools to make smart decisions with your money. It means you may need to delay gratification to save for your goals and give yourself peace of mind, both today and in the future. Setting and achieving your financial goals can provide the freedom to use your money to do the things you truly want to do, like retire with dignity, spend time with family or leave a legacy. Whatever your priority, making a plan is key.