Financial literacy: 4 tips to help you manage your money
Financial literacy is an important topic and one that is all-too-often avoided because of the complexity. Representatives of RTP Federal Credit Union offer four great tips to focus on finances without becoming overwhelmed.
Posted — UpdatedOrganizing your financial life may seem overwhelming, especially if you’re not used to budgeting. Whether you are responsible for yourself, for a partner, for kids, or for anyone else, a few basic strategies will help you manage your finances now and make plans for the future.
Follow these four tips to get started.
"Our members have several options available, such as in-person banking, the home banking platform, bill pay, and an online payment channel," said RTP Federal Credit Union President Charles Venable.
Ease of access means you can track finances in real time, helping you to avoid a common mistake.
"The biggest basic financial mistake is poor account management," said Jill Beck, RTP Federal Credit Union Marketing and Member Services Director. "People should monitor their accounts daily to see what transactions have gone through, what is pending, and to keep track of their balance."
When you know how much money you have, it will help you be aware of spending habits and add to savings.
"My recommendation is to create a list of monthly income and expenses on a spreadsheet or a piece of paper," said Venable. "This information can be used to develop a budget."
You then can make adjustments as you add or cancel expenses, depending on your and your family’s needs.
"Include everything from large expenses to smaller things, such as going to the movies or out to eat," said Beck. "After a budget is created, it’s helpful to write down everything you spent in a month. How close or far is it to what you projected in the budget? Do you need to adjust numbers?"
You may be exactly where you thought, or you might be surprised by what you spend.
"I believe people do not take the time to figure out how much they spend each month and what items and services are being purchased," Venable said. "For example, how often does an individual go out to eat each month? Here is an area where an individual can save money by staying home and cooking a meal."
Making a large purchase, such as a vehicle or house, often involves applying for a loan.
"Members often inquire about our savings and loan rates," said Beck. "They ask our guidance on what loan product and rate will best suit their needs and how their credit score will play a part in the rate they qualify for on a specific product."
Even if you don’t need a loan now, request annual copies of your credit report and note anything that looks incorrect, so it won’t hurt you later.
"Everyone should know their credit score and how that can affect their finances," said Beck. "Each year, consumers can get a free credit report from Equifax or Experian."
Because loan rates vary, depending on your credit history, call or visit your financial institution to ask for help with your specific situation.
Not only should you save but, if you’re a parent, you should help your children become savers, too.
"Parents should be the ones who begin this discussion with their children and teach them how to manage finances," said Beck. "It can start as easy as teaching them how to manage an allowance or earn money doing chores. Children will absolutely learn by example."
As your children earn money, you can help them create a plan for it.
Copyright 2024 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.