In observance of April being National Financial Literacy month, beBATONROUGE is giving you 10 Financial tips in partnership with Elite Financial Services, LLC. This information will keep your funds and credit in check, and also offer you financial best practices, so you can sustainably live your best life. Financial literacy is the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. It has become a hot topic lately in popular media as celebrities, such as 21 Savage and Jay Z, have pushed for people to be more responsible with their money and gain an understanding on how to use their finances to create generational wealth.
Check out these tips to take the first steps to financial responsibility:
Make a monthly personal or household budget. Budgets help you spend your money more efficiently and responsibly. Budgets also give you more control over your finances. How convenient! We have a downloadable money tracking sheet for you right here. If you prefer a new school way of doing this, Mint is a great way to help save towards your goals and to keep you on a budget. However, we’d suggest that there’s nothing better than writing and tracking your goals with pen (or pencil) and paper.
Open a savings account. The rule of thumb is to have three to six months worth of your monthly expenses in your savings account. When creating your monthly budget, try to allocate 10% of your income to savings. If you want to save for something special (vacations, holidays, etc.) open a separate account. Most banks do not charge for multiple accounts.
Start saving for retirement now. With inflation the value of your dollar will be worth less in the future than it is now. And, with modern medicine, the average life expectancy is longer. You won’t want to outlive your retirement income.
Check your credit score at least twice a year. You want to make sure no one has opened accounts in your name. If there are any negative factors on your report you can clear them up before they become bigger problems. Each credit bureau offers one free credit score a year.
If your credit is less than average you can build credit with a secured credit card or secured loan. You simply give your lender a deposit and they extend credit to you. As you make timely payments they report that the credit bureaus improving your credit score. Mint does a good job
Make an extra mortgage payment toward your principal. Just one extra payment per year can take years off your mortgage.
Pay more than the minimum payment on your credit cards. Most times the minimum payment is only covering interest and your balance is staying the same from month to month. Only use about 30% of your available credit. This will help you maintain your good credit score and in case of emergencies you’ll have a backup resource.
Do something useful with your tax refund. Saving, investing, paying down debt or starting a business are just a few alternatives to buying something that will only be temporary. If you want to try out investing, try some apps like Robinhood or Acorn and Stash. These apps are great for beginners or if you find that you’re not quite ready to be the Wolf of Wall Street.
File your tax returns on time. Yes, even if you owe. Filing on time will help you avoid the penalty for failure to file. And even though you will still accrue interest, setting up a payment plan if you can not afford to pay in full, will decrease interest and penalties that you receive for failure to pay.
Invest in life insurance. Not only will your policy help your loved ones when the time comes, but depending on the type of policy you have you may be able to use it to supplement income, borrow against it, or use it for investment purposes.
Just in case you’re are having trouble keeping track of your spending throughout the month Elite Financial Services has supplied us with a an easy checklist to help you keep track of your money and stick with your monthly budget.
Click below to receive a free Budget Worksheet, courtesy of Elite Financial Services, LLC.