April is Financial Literacy Month, and a great time to think about some important lessons everyone can learn about finances. Whether you're a parent looking to talk money with your kids or a professional looking for a few tips, there's always something to learn. Here are some fun activities you can do to expand your financial knowledge:
Make a Financial Date Night
Most people dread doing anything with their money – typically, they only think about their finances if there's a serious issue. When something significant comes up, they panic and figure out how much money they have to throw at the situation for it to go away. Money is a scary subject for many, and not dealing with it is often the easiest thing to do.
If you want to improve your knowledge of finances this month and get ahead of those emergency situations, schedule a financial date night. It doesn't matter if you are with a partner or on your own; it works the same way. Pick a day when there's nothing good on TV, no major social events, and no serious distractions. Put some light music on. Pour yourself a glass of wine. Sit down with your bills, paycheck, and anyone else who matters to your finances, and figure out where you stand.
Make this date a time to make dealing with your finances fun. You can do a little daydreaming and figure out what your future looks like. Jot down some goals and consider how to achieve them through your monthly budget. Make a financial date night part of your monthly routine to keep on top of your financial situation moving forward!
Build a List of Needs and Wants
One of the best ways to build an efficient budget is to start with a list of priorities. Begin by making a list of all your expenses – everything you spent money on that month. Then, break them into three categories.
The first category is the essential, non-negotiable bills. These are your big-ticket essentials that have severe consequences for missed payments. Your auto loan, rent or mortgage, utilities, and taxes go here. This is the bare minimum you need to bring in each month.
The second category is the essential, negotiable obligations. These are unsecured loans such as credit cards and student debt. You need to pay them, but if you have to miss a payment, these are the ones to skip. Paying these off is a priority after you make your essential payments, and you may have some room to negotiate and reduce these payments if things get dicey.
The third category is nonessential spending. This is everything else you spend money on each month, from that daily morning coffee run you convince yourself is essential to the late-night food delivery that you know is definitely not. This category is the best place to make cuts when you need to alter your budget.
Prioritizing is the first step to making solid plans and reshaping your financial destiny. When you know where your money is going, you can start to move from financially existing to intentionally spending – and that's the beginning of improving your financial literacy.
Take Charge of Your Retirement Planning
An important part of your financial security is planning for the day when you can't work anymore. Financial literacy is all about taking an active role in thinking about the future, and there are a few concrete steps you can take in April to put yourself ahead of the game.
If you're not already doing so, contribute to your employer's 401(k) program. Most employers will match contributions up to a certain level. If you're not contributing enough to get the full amount of that match, you're leaving money on the table. Set up automatic contributions out of every paycheck to save for the future without thinking about it.
April 15th is the last day to contribute to an IRA for this contribution year. Even if you've already filed your taxes, you can file an amended return to get credit for your contribution. More importantly, you can add to your retirement fund and take advantage of the tax benefits of those accounts.
One important thing to remember about retirement planning is that there's no shame in asking for help. Retirement laws are complicated, and it can take an expert to really understand their intricacies. Speaking with a qualified financial planner can remove some of the guesswork. This conversation can also help you clarify what retirement looks like: what your goals are, how much you need to save to achieve them, and what programs are available to help you get there.
If you're counting on Social Security to provide for your entire retirement, you're in for a rude awakening. Benefits are shrinking, and the fiscal solvency of the program is always in danger. Taking an active role in retirement planning is the best way to get peace of mind about your future. It's never too late – retirement planning you do at 50 is better than retirement planning that never gets done!
If you need more help with organizing your finances, reach out to Member Services at memberservices@usalliance.org or give us a call at +1 (800) 431-2754. .
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