April is Financial Literacy Month. The goal of Financial Literacy Month is to empower consumers to improve their financial position by providing the tools and education necessary to become fully financially literate. The process involves taking 30 steps to understanding and improving finances. A review of these steps can help even those of us who are financially savvy to revisit our financial goals.

The 30 steps to financial literacy can be broken down into five categories as follows:

1. Commitment and communication. Several steps revolve around the process of defining your willingness to improve your financial state. You commit to yourself as well as to anyone else that you’re working with on your finances (a spouse, for example). You agree to learn new methods of communication about finances in order to empower all parties. It is recommended that one person in the household act as the family’s Chief Financial Officer but that all parties are open, communicative and honest about money. As the steps progress, you renew your commitment to the process of improving your personal finances.

2. Analysis of personal finances. Financial literacy requires that you are brutally honest with yourself about your personal finances. This involves an in-depth analysis of your spending and income. It also means that you must take an honest look at the way that you approach money. What kind of spender are you? Do you stay aware of your credit score? Are you living with too much debt? In this stage, you will also calculate your current net worth. Getting a solid picture of your current financial state is crucial to know how to move forward financially.

3. Financial organization. It is impossible to be truly clear about what is happening with your personal finances if you aren’t organized in the way that you approach them. The 30 steps include steps that are designed to assist you in clearing out the clutter (such as receipts from five years ago) and organizing what’s left in proper files and budget tracking tools. Learning how to track your spending will be a part of this as well.
Set financial goals. Once you have a truly honest picture of where you are with your finances right now, you are ready to start setting some financial goals. You will make a list of your financial needs and wants to help determine your goals. For example, if you really want to pay off your debt then you know that you have to set goals around that. If that’s not a priority but buying a home is then you will set your goals around that. Identifying and ranking your personal financial wants and needs will be a major step in the 30-step process.

4. Steps towards improvement. There are many things that you can do right now in order to improve the state of your finances. For example, once you receive a credit report you can work to make sure that the report is accurate. There are also steps that you will take that will help to improve things for you down the line. For example, you can start a savings account to prepare for the times that aren’t anticipated by the rest of your planning. You can start to work with a financial planner to make a plan for meeting your goals.

These steps can be taken by people with any level of financial literacy. In fact, people who consider themselves quite smart about their finances can really benefit from going back to these basic steps. They assist you in reviewing where you are at with your finances at the current time, setting goals for where you would like to be in the future and figuring out what steps you need to take to get from here to there.