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April is Financial Literacy Month
CFPB to become a financial literacy program under Trump rather than an enforcement agency

How to improve your finances during Financial Literacy Month

Money $ & CentsIt’s a good time during April’s Financial Literacy Month to take a look at how you handle your finances.

What is financial literacy? It’s knowing how to manage your personal finances.

How are Americans doing with financial literacy? In a survey of 1,500 people, respondents estimated that lacking knowledge about personal finances cost them an average of $1,230 in 2018, according to a study by the National Financial Educators Council.

What can you do to improve your financial literacy?

Take a look at your finances.

If you don’t have one, you need a budget. It’s a financial plan that will help you reach your goals. To develop a budget, you’ll need to keep track of your spending. Write down what your fixed monthly expenses are such as car payments and rent or mortgage payments. Determine what your periodic expenses are. They include items such as vacations and tax payments. Then you’ll need to track your variable expenses – food, clothing, transportation, and entertainment, costs that probably change every month.

Keeping track of your spending is time-consuming. I’ve done it a dozen times when working with a financial planner. It’s worth it because of the valuable information it will give you. It makes you feel like your financial life is more firmly grounded.

Make decisions about your financial goals.

Set short- and long-term goals. After you keep track of your expenses, you’ll be better able to make decisions on how to allocate your money.

Establish an emergency fund.

It’s important to have money set aside if your car breaks down or if you have to go to the emergency room. The amount varies for individuals and families of different sizes and circumstances, but three to six months of expenses is a good place to start.

Make a savings plan.

Making a weekly savings target helps make saving easier by breaking it up into manageable pieces. This can help you reach your goals and deal with unexpected expenses. See the Consumer Financial Protection Bureau’s Savings Plan for ideas on how to get started.

Check out automatically saving money by having your bank or credit union move money from your checking account to your savings or investment account on a regular basis, such as a day or two after your paycheck is expected. You also can ask your employer if you can split your paycheck between a checking and savings account so a part of your pay gets automatically saved each pay period.

No matter what your age is, save money for retirement. If you begin early, you have the advantage of compound interest building up substantially over the years.

Pay off your debts.

Now that you know more about your finances by figuring out where your money goes and making a budget, you can make a plan to pay off your debts. If you’ve accumulated a large amount of debt and can’t figure out how to make progress, a nonprofit credit counseling agency can set up a debt management plan to cut your interest rate and put you on a repayment plan.

Watch out for debt settlement programs. These programs often require that you deposit money in a special savings account for 36 months or more before all your debts will be settled. Many people have trouble making these payments long enough to get all, or even some, of their debts, settled, and end up dropping out of the programs as a result.

Read your credit reports and make corrections, if necessary.

You are entitled to a free credit report every 12 months from each of the three major consumer reporting companies – Equifax, Experian, and TransUnion. You can request copies from

Credit reports may affect your mortgage rates, credit card approvals, apartment requests, or perhaps your job application. Reviewing credit reports can help you catch signs of identity theft early.

Be careful of websites that claim to offer free credit reports. Some of these websites will only give you a free report if you buy other products or services. Other websites give you a free report and then bill you for services you have to cancel.

Pay attention to your credit cards.

You may not have noticed what the rate was when you signed up for a credit card or the rate may have gone up. Retail credit cards usually have much higher rates than general credit cards. Be sure to pay off retail credit cards every month if you decide to keep them.

Remember to read your credit card statements frequently to make sure that no one has stolen the number of your account and is charging items to you. Look carefully at the small amounts, too, because that’s how thieves start out sometimes. Contact your financial institution right away if you see something that looks wrong or if you see an error. I had a charge that didn’t look right from Russia. Sure enough, it was a thief who had somehow gotten my credit card number.

Be informed about student loans.

You should exhaust scholarships, grants, and federal student loans before taking out a private student loan. These loans don’t offer the flexible repayment terms or protections provided by federal student loans. Private student loans aren’t funded or subsidized by the federal government. They’re funded by banks, credit unions, state loan programs, or other types of lenders.

Make sure you’re getting the best possible advice about your federal student loan debt repayment. A report from the Office of the Inspector General of the U.S. Department of Education showed the department hadn’t adequately supervised federal student loan servicers, companies that handle the billing, and other services on a federal student loan.

Make sure you’re getting the best possible terms on your loans and mortgage.

As you’re reviewing your finances, take a look at your mortgage. Can you get a better interest rate from a reliable lender? Better yet, can you pay off your mortgage early without a penalty? I set a goal to pay off my mortgage in 15 years. I didn’t make it, taking me 18 instead. However, I saved thousands of dollars by paying off my mortgage early.

Check your local credit union to see if you can get a better rate on your auto loan. Many credit unions take members now from the public rather than a specific group.

Never take out a payday loan. People can get caught up in debt traps, continuing to borrow money each month to pay off last month’s debt. Interest rates are exorbitant and late fees are costly, too, on payday loans.

Find out your credit score.

You can get your credit score from a credit card or other loan statement, a non-profit counselor, or for a fee from a credit-reporting agency.

Your credit score can affect your ability to buy a home or car, get a credit card, rent an apartment, or perhaps get a job.

Choose a good financial advisor.

It’s good to work with a certified financial planner to help with your investments. I’ve written articles about how to select one, but I’ve had mixed results myself. Interview three to five financial planners in your community. If you’re not getting the results you want, do interviews again to see if you can get what you need.

Use financial resources.

Here are some suggestions to consider for improving your financial knowhow: is dedicated to teaching the basics of financial education. You can find advice on subjects such as buying a home, balancing a checkbook, or investing in a 401(k).

CNN’s Money 101 provides financial basics, such as budgeting and setting financial goals, in a tutorial-style format. offers financial tips and forecasts., created by the National Endowment for Financial Education, offers tips for people who want to take charge of their money., provided by the American Institute of CPAs, offers tools and information to help you understand personal finances through every stage of life., offered by ClearPoint Credit Counseling, includes information on credit, housing, budgeting, debt management, and life events.

For more resources to help you improve your financial literacy during Financial Literacy Month and throughout the year, see Money Crashers’ “Further Reading on Financial Literacy.” The Consumer Financial Protection Agency also offers valuable information on financial issues.


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Excellent info as always about finances.


Hi Rebecca,

Thanks. Financial Literacy Month is a good time to go over the basics of your finances. It can be difficult to change habits, but there's a lot of information available today on financial planning.


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