April is Financial Literacy Month. It’s a great time to think about some important lessons everyone can learn about finances. Whether you’re a parent looking to make talking money with your kids easier 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
If you want to improve your knowledge of finances this month, schedule a financial date night. It doesn’t matter if you have a significant other or you’re 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. Sit down with your bills, your paycheck and anyone else who matters to your finances, and figure out where you stand.
This can be 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 think about how you can achieve them through your monthly budget. Make a financial date night part of your monthly routine.
Build a List of Needs and Wants
One of the best ways to build an efficient budget is to start from a list of priorities. What do you spend your money on each month? Make a list of all your expenses. Then, break them into one of three categories.
The first category is the essential, non-negotiable bills. These are your big-ticket essentials that have serious consequences for missed payments. Your auto loan, your rent or mortgage, your utilities, and your 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. 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 necessary.
The third category is the non-essential spending. This is everything else you spend money on each month. This is the best place to make cuts when you want to shift your priorities.
Making a list of priorities is the first step to making solid plans and reshaping your own financial future. When you know where your money is going, you can start to move from financially existing to intentionally spending.
Take Charge of Your Retirement Planning
Financial security means planning for the day when you can’t work anymore. Financial literacy is all about taking an active role in thinking about that future. 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 automate that savings.
April 18 is the last day to contribute to an IRA for the 2016 tax 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 nest-egg and take advantage of the tax benefits of those accounts.
There’s also no shame in asking for help. Retirement laws are complicated, and it takes an expert to really understand everything. Speaking with a qualified financial planner can take some of the guesswork out of it. 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 may want to reconsider. Benefits are shrinking and the financial wealth of the program is always in danger. Taking an active role in your retirement planning is the best way to get some 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.
These activities will help you expand your financial knowledge. Happy Financial Literacy Month from Partner Colorado Credit Union!