Your grasp of financial concepts such as creating a budget, understanding credit and saving money can help you make smarter decisions that impact your ability to provide for yourself and your loved ones.
April is National Financial Literacy month, which is the perfect opportunity to refresh your money management know-how. To celebrate, KEYS® by GM Financial is sharing three important financial concepts that can help you build a strong foundation, empower smarter decision-making and drive a brighter financial future.
Build a budget
A budget is a monthly plan that helps you manage your money, including your income, expenses and savings. Get started on your personal budget by downloading our budget worksheet.
If you’re looking for something more high tech, look into financial apps for your smartphone. Many apps sync directly to your bank to help you track expenses and stick to your plan.
As you figure out what kind of budget works for you, keep your long-term goals in mind. Don’t be too hard on yourself if you slip up. It gets easier with practice.
When building a budget, your savings category is important for helping you afford emergencies and long-term goals. Here are a few tips to save more effectively:
- Pay yourself first. Move money to your savings account every time you get paid.
- Make savings automatic. Ask your bank or adjust settings on your online accounts to transfer a percentage of your income into savings each pay period.
- Fortify your emergency fund. You should try to keep at least three to six months of living expenses on hand in an emergency fund for unplanned or emergency expenses.
Give yourself credit
Credit allows you to obtain goods or services before you pay (with the trust that a payment will be made in the future). It can help you secure financing for big purchases that you may not be able to afford out of pocket, such as a new vehicle. It can also affect things like insurance rates, employment and your ability to rent housing.
Keep in mind that in most cases, credit has a cost, so it’s important to understand how your score is calculated. Spending money responsibly, paying your bills on time and only opening new accounts as needed can help you build credit or rebuild credit.
Financial literacy is a lifelong project. Ready to get started? KEYS Online has courses that can help you learn about everything from upgrading your lifestyle to planning for retirement.
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