Tips for Improving Financial Literacy and Taking Control of Family Finances

April 18, 2024

April brings many things, including beautiful blooming flowers and a desire to do spring cleaning. It's also a good opportunity to clean-up family finances since it is the time of year we observe National Financial Literacy Month. Since 2003 this has been a call to action for Americans to gain practical skills and strategies for developing and maintaining smart money management habits, which can lead to a more promising financial future for themselves and their communities.

A recent surveyrevealed that 32% of teenagers don't know the difference between a credit card and a debit card. The Internet and your favorite financial institutions provide lots of resources for self-education, but, as a country, we must do a better job of ensuring everyone understands the importance of financial literacy. Contrary to common belief, managing your finances doesn't have to be complicated or require you to be a financial expert. It's not about going without things you need or even things that aren't necessities, but you enjoy. Instead, it's about finding a balance, making wise choices and planning ahead. Below are a few simple strategies to help improve your financial literacy and take control of your finances:

1. Start with a Budget-Learning how to create and maintain a budget is a simple yet powerful step toward improving your financial literacy and achieving financial stability. Managing your finances is easier when you know where your money goes. Budgeting helps avoid cash crunches and identify opportunities to save money by setting aside money for essential expenses first and then deciding on spending amounts for optional purchases. Budgeting can be as simple as writing down your spending amounts and dates to track when you have enough money to pay the bills, using budgeting software, or paying bills using an auto debit or bill pay directly from your online account. What matters most is finding and committing to a method that works for you.
2. Educate Yourself-Educating yourself about financial matters is essential no matter where you are in life. And learning has never been easier-from online resources to in-person classes or a combination of both. Today, countless financial educational tools are available to help you acquire new knowledge based on your financial literacy level. These tools include books, podcasts, online courses, or even a financial expert's social media posts. You can learn everything from basic budgeting techniques to saving for retirement. With this knowledge, you can confidently take control of your finances and make more informed decisions.
3. Understand and Manage Your Debt-According to recent Federal Reserve Bank of New York (FRBNY) statistics, U.S. household debt increased by 4.8% from Q3 2022 to Q3 2023, including mortgages, revolving home equity loans, auto loans, credit cards and student loans. One critical step along your journey to financial health is to fully understand the terms and conditions of your debts and create a plan to manage how you use those products. Common strategies include consolidating debt to reduce monthly payments or paying down debt using the snowball method (paying off smaller balances first and gradually moving on to larger ones). Debt can help you purchase the things you need when you need them and pay for them over time, but it needs to be managed so payments don't overwhelm your monthly income.
4. Utilize Technology-Thanks to the help of financial technology and data access, tools to help you manage your money and bills are readily available and easy to use. Many financial apps and online tools available today can automate several aspects of money management, including tracking your expenses, growing your savings and learning to invest wisely. You can even put limits on spending or set alerts for certain transactions. These tools can be a powerful ally in managing your finances, making controlling your money and planning for the future more straightforward.
5. Plan for the Future-A big advantage of financial literacy is that it helps you plan for the future, which includes creating an emergency fund, saving for retirement and understanding how to provide for your family. Yet, a recent 'emergency savings' report revealed that more than 1 in 5 Americans have no emergency savings. Planning for the future through effective budgeting, saving and investing can significantly reduce financial anxiety for both short-term and long-term decisions.

Enova offers a number of financial literacy and wellness tools and resources to help people along their financial journey. Through its partnership with EverFi, Enova's NetCredit and CashNetUSA customers can take advantage of free online financial education classes covering everything from building emergency funds to improving credit scores, budgeting resources and more.

Financial Literacy Month presents an excellent opportunity to focus on your financial management skills by improving your knowledge of financial basics and building skills for tracking your spending and managing your finances. Whether you're taking your first steps or just refreshing your knowledge, learning how to make a plan and stick to it will put you well on your way to a more secure and fulfilling financial future.

DISCLAIMER-This content is for informational purposes only. NetCredit and its affiliates do not provide financial, investment, legal or tax advice. Consult your professional advisors before making any financial decisions.

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