Financially Literate: To Be or Not To Be?
April is Financial Literacy Month!
These days, it’s so easy to find whatever information you need with a quick tap or voice command via your smart phone or computer. Whether you’re dying to know (pun intended) who survived the final episode of The Walking Dead – or about something more practical like how much you can contribute to your IRA by this Tuesday, April 18 – there are plenty of quick resources at your fingertips to help you.
Given this, it’s easy to rationalize that there’s no need to be “literate” when it comes to your finances. When it’s time to make a decision about something having to do with your money, you can just Google it and move on.
While there’s some truth in that statement, it’s also the reason WHY financial literacy is so important.
In many ways, one could argue instead that:
- Now that we have so much information readily available to us, there is no excuse why we can’t be more savvy with our finances, and
- In fact, we have to be more financial literate to be able to sort through all the information and figure out what’s true versus not true, what’s good advice versus bad.
If you want to be more financially literate, but also don’t want the overwhelm that may come with all the information out there, here are a few ideas to help you focus your efforts and get started:
LIMIT YOUR SUBSCRIPTIONS
Find two personal financial resources to follow this month, and stick to only those two… for now. While it’s always good to do your research and get another opinion, having two provides you with some variety while also preventing you from information overload.
If you’re making a major decision – like purchasing a home or shopping around for life insurance – you’ll want to solicit professional advice or double check your information with other resources. But for now, picking two will provide plenty of new knowledge and tips around a personal financial topic that interests you.
Pick a podcast to listen to on your commute, such as The Wall Street Journal’s Watching Your Wealth podcast, a regular money blog (like this one) plus a magazine subscription, such as Kiplinger or Money Magazine, or dive into a classic book such as The Intelligent Investor by Benjamin Graham or The Investment Answer by Daniel Goldie and Gordon Murray, or a newer book such as I Will Teach You To Be Rich by Ramit Sethi or Unshakeable by Tony Robbins. A podcast plus an online/magazine subscription or book should keep you plenty busy and provide you with enough you need to get started on your financial literacy sprint this month.
BE TAX SAVVY
While I’m not a CPA, I find that reviewing clients’ tax returns provides so much essential information and possible strategies for wealth building. If you do your own taxes, you’re hopefully very familiar with some of these strategies, (e.g. involving opening and contributing to appropriate retirement accounts, taking certain deductions, etc.), but there are still opportunities to get even more savvy.
While it’s likely too late to make changes to your 2016 return, challenge yourself this month to learn more about tax strategies that you can implement now and may help you in the coming year. If you don’t do your own taxes, take some time to review your return and really understand what’s behind each of the line items and how to go about completing the return on your own if you need to.
FOCUS ON CREATING NEW HABITS
In many ways, being financially literate is less about information and more about creating habits to learn the information and implement the information. (This is a big topic, so a future blog post dedicated to this subjected alone will be forthcoming).
As mentioned at the beginning of this article, the information we need is out there – but do we act on it? Do we take the time to actually learn it?
To create better habits, the two resources I recommend are: The Power of Habit by Charles Duhigg and The Art of Work by Stephen Pressfield (while the later is more about completing creative projects, like writing a book, the lessons here can be applied to any goal you are trying to achieve.) If you can begin applying just one of the principles outlined in these books to your personal finances, you’re off to a great start.
FIND AN INSPIRATIONAL GOAL
Remember your New Year’s Resolutions? Did any of them involve your personal finances?
If they’ve faltered a bit and you’ve gotten a little off track, it’s not too late to get started. With April being Financial Literacy Month, it’s the perfect time to dust them off and re-visit them. Or perhaps it’s time to create a new goal around money that’s more relevant to your situation now that we’re a few months into 2017.
It’s already the second week of the month, so let’s get started! Remember to email me if you need additional support or just want to share what you’re working on at jennifer@financialwealthbeing.com.
Onward!