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.
But if the nuances of personal finance aren’t your strong suit, you’re not alone. According to Standard & Poor’s recent survey of 150,000 participants, global financial literacy levels are low. Just 57% of U.S. adults can be considered financially literate, compared to 33% of adults worldwide. Women’s literacy levels tend to be lower than men’s.
Now is the perfect opportunity to ramp up your financial knowledge. To celebrate National Financial Literacy Month, KEYSSMby 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, do some research 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, be sure to 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 six to eight 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. 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 life-long project. Download our credit education brochure for more terms and concepts you need to know to unlock your financial future.
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