LOUISVILLE, Ky. (WAVE) - April is a month to dedicate your time to make sure your money is in order.
The pandemic has made it even more crucial than ever before with so many families and businesses facing issues they couldn’t have imagined a year ago.
Having greater financial literacy would have helped many people better manage their finances amid the Pandemic.
In the words of the great Maya Angelou “When you know better. You do better.”
Financial Literacy may sound like an unattainable goal, but it may be much simpler than people think.
“We’re talking about just a basic understanding of our own personal finances,” Jeanette Pavini, savings expert and author of the book The Joy Of Saving, said. “In other words, understanding how much money we have coming in, what we have going out and how we can reduce our monthly expenses.”
This simple critical skill begins your journey to achieving self-sufficiency and financial stability. The Ostrich method of burying your head in the sand when you’re unsure if you can make ends meet is not beneficial for your bank account or your family.
”I don’t think there’s any age where it’s too late to actually learn and take control,” Pavini said. “You are never too old or too young to start life’s lessons of personal financial management, budgeting and investing.”
“We have to teach ourselves and we have to teach our kids,” Pavini said. “If not they go out into the real world naïve to the realities of financial pitfalls.”
A recent study from Capital Group found that people are more comfortable talking about other topics including marriage problems, race, sex, and politics rather than money management.
Money management should be learned early in life because later mistakes can cost you literally. The first lesson can start with everyday savings at the grocery store.
“No. 1: sign up for the loyalty card at your local grocery store,” Pavini said. “No. 2: shop what’s on sale. Plan your menu around that. Get the kids involved.”
Coupons and savings apps are essential and very important when trying to save the most you can.
“Using coupons is worth every second it takes to look for them and apply them,” Pavini said.
Action and knowledge are crucial in creating a bright financial future. These are seven steps you can do to make sure you stay on top of your finances.
- Calculate your monthly income.
- Set and stick to a budget.
- Account for all bills and know where your money goes.
- Prioritize saving or start an emergency fund.
- Understand how to use a credit card.
- Protect your identity and make sure your account information is secure.
- Learn about your credit score.
“Be aware of what your credit is,” Pavini said. “Annual creditreport.com is the website that will give you three free credit reports a year. Know what’s in your credit report. You don’t want a negative ding on your credit report if it shouldn’t be there.”
The way you’ve handled your money and your bills in the past helps lenders decide if they want to do business with you.
“The biggest mistake people make is to think they can’t control, or they have no control over their monthly finances,” Pavini said.
Not saving money is another big mistake people make.
Fifth three percent of Americans want to save more money, according to Fidelity Investments’ financial resolutions study. Fifty one percent said they hope to pay down debt, and 35 percent want to spend less. All of it can be done with a little effort.
“Even if you’re saving $5 a week it’s a savings and it will add up and it shifts your mind into thinking you can save,” Pavini said. “Saving does not have to be a drudgery. It can be a really positive, powerful thing. We need to get as excited in seeing $100 in our savings account as we do seeing the $500 coat that was marked down to $100 sitting in our closet.”
To get your credit report you can visit www.annualcreditreport.com.