In honor of Financial Literacy Month, you might want to set some personal goals for becoming money smart this year. In addition to your major goals, you should identify a small first step that you can take towards each goal. You may not meet your goals during Financial Literacy Month but you can definitely take those first tiny steps before April has come to an end.
5 Important Goals for Financial Literacy Month (and the small steps to kick them off) are:
1. Know your financial self inside and out. The number one key to becoming truly smart about your money is to make sure that you know exactly where you stand financially. This involves many different things. It can mean doing an honest appraisal of your current net worth or it can mean working with a therapist to get to the deepest roots of your money problems. It’s an ongoing life process. However, you can start with an easy first step. Sometime during Financial Literacy Month, sit down and brainstorm ten questions about your financial self that you need to get answers to. Examples include “how much money do I spend each month” and “what do I know about investments?” Just starting to ask the questions will put you on your way to becoming more financially literate.
2. Learn to communicate appropriately about money with friends, family members and others. Talking about money is a great way to get a better education about finance. Unfortunately, this isn’t something that a lot of us are good at. Money is a loaded topic and learning to talk honestly, calmly and fairly about it takes time. The one small step that you can make today is to choose a single person with whom you want to speak more about money. You may not want to choose the toughest person in your life to start with (like a spouse who has to share money with you.) Start small and work your way up to communicating with those closest to you.
3. Pay off debt, increase savings. Depending on where you are with your finances, your goal might be to pay off existing debts or you may have done that and are now ready to increase your savings. Whatever the case, the goal here is to start putting more money into these things. You can start small this month by making a single deposit into one of these accounts. Give up something that costs you a bit of money this month and put the money towards your debt of savings instead.
4. Put together a personal finance team. You need professionals that can assist you with your personal finances. This includes having a great bank, a good mortgage provider, an attorney who understands your financial goals and a tax preparer who can get you the most back on your taxes each year. You may or may not need all of these people but surely you need someone. The small step that you can take today is to identify a list of professionals who you would like to have as a part of your team one day in the future. Think about future financial situations (when you retire, when you sell your home, etc.) and include the professionals that you will need on your team at that time. You don’t need to find these people yet but knowing who to look for is a great first step.
5. Keep learning about money. Financial literacy means that you never stop learning about money. There is always more to study. Make a commitment to yourself to keep on top of this education. The one small step that you can take today is to order a new book or sign up for a new finance class. Consider exploring an area of personal finance that you’re not familiar with yet to really challenge yourself with this first small step.
There are many small steps that you can start taking immediately in order to begin gaining literacy in finances. The important thing is that you not only set those big goals but also start to take those small steps that will get the ball rolling.