Posted on March 28, 2016 in Advice
3 Ways Financial Literacy Month Can Benefit Your Bottom Line
Every April, a number of schools, government agencies and nonprofits across the country sponsor financial education programs in honor of Financial Literacy Month. Whether you partake in any of the official #FLM2016 activities or not, having a month dedicated to personal finances is a great catalyst to add to your personal finance knowledge, revisit financial goals and make changes, if necessary.
“Before you make a major money decision, such as buying a house, getting a credit card, taking out a loan, starting a family, or paying down debt, it makes sense to brush up on your own financial skills,” writes Janet Maragioglio over at The Simple Dollar. “If you’re no longer a student, you can still go ‘back to school’ for financial education.”
So how can you use Financial Literacy Month to move the dial on your own financial plans? Here are three ways to get started.
1. Fine-tune financial goals
What do you want to achieve when it comes to money? If you answered with a vague “have more of it” or “spend less of it,” your financial goals could probably use a reboot. How do you know where your financial literacy is lacking if you don’t know exactly what you want to accomplish?
Experts recommend making goals SMART (specific, measurable, achievable, realistic and time-bound). It’s “save $10,000 in an emergency fund by the end of the year” versus “save more money.” But even SMART financial goals can get overwhelming—and unattainable—pretty quickly.
When it comes to setting realistic goals, “a great place to start is to better understand who you are financially and learn your money personality,” says Ted Beck, President and CEO of the National Endowment for Financial Education (NEFE). He recommends taking a quiz like this to help determine what’s behind your financial decisions. “Tying your budget, goals and financial priorities to your personality assessment provides a much higher chance you will stick to your resolutions,” he explains.
And if you need further financial goal inspiration, check out Jeff Rose’s Top 10 Financial Goals for 2016 on the Good Financial Cents blog.
2. It pays to prioritize
One of the challenges with financial education is that, unless you’re using the knowledge all the time (for example, if you work in the financial industry), you’re likely to forget it. “Financial education is no different from other forms of education. If you don’t use it, it goes away,” said University of Colorado’s John Lynch in a recent interview with Morningstar.
That’s why many experts recommend “just-in-time” personal finance resources instead of broad, ongoing education. “For example, let’s say somebody is about to retire,” says Lynch, “that’s a point in time where they will be receptive to financial education.”
Take a look at your goals and decide what’s most immediate for you. For example, you may need to start by tackling your budget vs. learning what it takes to buy a home. Once you’ve prioritized your financial goals, you can decide what you’d like to focus on this month and where you could benefit from some extra education.
3. Find the right resources
It’s great that Financial Literacy Month offers some extra events and resources for getting your money in order, but the truth is that “just-in-time” financial education is available year-round. The trick is finding the resources that work for you.
For example, maybe this month you’ll challenge yourself to reading a book that pertains to your financial goals. Barry Glassman at Forbes offers a list of best personal finance books by age, while The Simple Dollar ranks popular personal finance books in order of best to worst.
Personal finance blogs are another great way to stay up-to-date on financial information. There are plenty of them out there, so perhaps your goal this month is to check out a few and find one that you’ll subscribe to or read on a regular basis. For example, here’s a list of great financial blogs for millennials.
And if you’re ready to take action, there are simple things you can do to kick-start your financial goals this month. Downloading the Dobot app is one really easy way to get started—we help you save money and invest for the things you care about, no PhD required.
Whether you call it financial literacy, awareness, wellness, or something else, we can all agree that gaining financial knowledge is a good thing. This month’s focus on finances is a great excuse to bolster your know-how and make sure your finances are on track to accomplish the things that matter to you.