April is Financial Literacy Month. What does that mean exactly? Financial Literacy is about having the information to make informed and effective decisions about your money. Are you financially literate? And if, like most Americans you’re not as literate as you’d like to be, where do you begin?
The first step to financial literacy is to be honest about the way you have been spending money. Studies have shown that over 50% of American adults do not know where their money goes, though they think they do. Do you know where you money goes? If you don’t, you should write down every single expenditure for thirty days. I think you will be amazed and enlightened to see where all your hard earned money goes. It’s a simple exercise, a great eye-opener. and a great first step.
Another way to get honest about your finances is figuring out your net worth. You should know and track your net worth. Your net worth is the difference between what you own and what you owe. We have a net worth calculator that is very easy to use. Knowing your net worth is an important step when setting financial goals and provides a point of comparison as you move forward.
Once you have looked honestly at your finances, tracked your spending, and know your net worth, the next step in your quest for financial literacy is educating yourself on all the basics. Fill in the gaps in your education so you can be truly successful with money. Personal money management isn’t complicated. Everyone has the ability to take full control of every aspect of their personal finances. Money Smart provides that education and has the tools you need to begin. So begin. Start this month. Learn what you need to know, and then trust yourself. The truth is that everyone has the ability to become financially literate, control their personal finances and create abundance.