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3 Simple Steps to Get Ahead Financially

Kickoff Financial Literacy Month with these 3 simple steps.

An entire month dedicated to financial literacy?

Yep. It’s that important.

The month of April has been designated as Financial Literacy Month by the U.S. government since 2004, with the goal being to provide resources and education to help Americans learn and understand how to effectively manage their money.

Financial literacy isn’t just about budgeting or learning fancy financial lingo. It’s really a discussion about what you want out of life and how you can effectively manage your personal finances to achieve those goals and sustain a specific lifestyle comfortably – whatever that may look like for you.

Being financially literate is all about having the ability to use knowledge and skills to manage your financial resources to the advantage of your overall personal well-being.

So, if any discussion of numbers usually has you burying your head in the sand, keep your eye on the prize (your big, exciting goals!) and have a little fun with this. Truth of the matter is, everyone must deal with money so might as well learn as much as you can to become more financially empowered and equipped.

To kick off Financial Literacy Month, here are 3 simple steps you can take right now:

1. Create your personal financial snapshot (i.e. your net worth). This may sound like a big ask, but the best place to start is to take inventory of your finances: what types of accounts you own, their balances currently, how your accounts are titled, , debt balances and how much longer you’ll be paying on them, your low-liquid assets such as a car or home, etc.

And keep in mind: they’re just numbers. So, whatever your personal financial snapshot looks like, remember that it is not an indication of your success or failure in life. You’re just gathering data, because you can’t figure out how to get to where you want to be if you don’t have a good handle on where you are right now.

 You gotta develop a starting point to benchmark against.

2. Write down 1 short-term and 1 long-term financial goal. Make sure it is SMART.

A short-term financial goal is one you want to achieve within 1-5 years and a long-term one is what you want to achieve more than 5 years from now.

Here’s an example of a bad financial goal: I want to buy a car.

Here’s a SMART financial goal: I want to buy a $35,000 car in two years. On the 17th and 28th of each month, I will transfer $125 into my high interest savings account to have $6,000 as a down payment for a car within the next 24 months. The high interest savings account needs to yield at least 1.5%.

This goal is SMART: Specific, Measurable, Achievable, Realistic, and Timely.

3. Find an accountability partner. Whether it’s a professional financial advisor, therapist, CPA or a trusted friend who’s working toward similar financial goals, it’s important to find someone who can hold you accountable and encourage you to remember why working on your finances matters. Whomever you choose as your accountability partner, make sure he/she is truly committed to holding you responsible to reaching your goals. Preferably, this should be someone who’s neutral to you and can give you honest feedback and critiques, not someone who will give you excuses and be lenient.

The Bottom Line: 

Financial Literacy Month is an opportunity to hone financial practices and skills that can serve your life goals year-round. Start taking steps, no matter how small, to take better control of your money and become more aware of how it can improve and enhance your life.

I'm Helen

Having worked in finance for over a decade, I know what matters most to clients. Here, I share with you what you really need to do to stay on top of your money and retire rich.
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