April is Financial Literacy Month! Do the following financial terms ‘budget’, ‘savings’, and ‘expenses’ make you want to quit reading and avoid this topic altogether? If so, then please keep reading because this blog post is definitely for you and applicable for everyone. You work hard to earn that money! Knowing where each penny is being spent and saved is only going to be beneficial for your present and future financial life. Every day your actions are either contributing or taking away from your financial life goals. What are your financial goals and how will you succeed at making and keeping them?
Let’s start with the most basic financial skill and that is budgeting. Budgeting is a skill that anyone can learn. There are so many positive outcomes from making and keeping a personal budget. Who doesn’t want to have peace of mind about their finances? Would you like to achieve short-term or long-term personal money goals? Budgeting can help you do this. Budgeting is a lifelong skill that will take time and practice, but once you get the hang of it, the outcome will be worth your time and effort.
Next, let’s talk about why you should create a personal budget. First and foremost it helps you to not overspend! No one likes to be in the red at the end of the month. Have you ever experienced an unexpected car maintenance expense, like a flat tire? What about new rotors or unexpected engine issues? As part of your monthly budget, you can assign money towards an emergency fund. This way, when a sudden emergency pops up, it won’t be such a blow to your finances. Some financial gurus suggest that you have an emergency fund of $1000. Whether you agree with that amount or not, the idea of having an emergency fund of some kind is the main point. It’s better to have an emergency fund with some amount of money than to have one with none.
A monthly budget also helps you to really begin to prioritize your financial monthly goals. Some of your monthly financial goals may include paying down debt, saving money for a newer used car, or possibly putting money towards a savings account or a retirement fund. How much of your money is being spent on ‘wants’, like dining out and entertainment? Can you cut back in those categories so you can put more towards your personal financial goal? Remember, you’ve worked hard to earn your money and you deserve to know where every dollar is going. The great thing about creating your personal budget is that during this process you become more financially aware – which in turn allows you to PLAN where your money goes, instead of it just going anywhere and everywhere.