Americans are notoriously bad with money.
In fact, a study released by the Global Financial Literacy Excellence Center last year found that only 22 percent of women and 38 percent of men passed a quiz on basic financial concepts. For people under the age of 35, the numbers were even worse.
Understanding the fundamentals of personal finance is important for your future and financial security. Financial Literacy Month is the perfect time to brush up on the basics and establish good money habits.
Financial Literacy Month
The U.S. Senate designated April as Financial Literacy Month in 2003. They created the observance to increase awareness about the importance of personal finance education and the consequences that come along with not understanding financial concepts.
Money Management International, a non-profit debt counseling organization, crafted a step-by-step guide for financial wellness. From debt repayment to building savings, they’ve created a detailed plan to help you get started.
Here’s what you can do each week during Financial Literacy Month to get your finances in order.
Week 1: Get organized
Financial wellness is impossible to achieve if you don’t know your starting point. Use the first week to organize yourself and get a full picture of your current situation.
List out all of your bank accounts, credit cards, student loans, car loans, retirement funds, and investment accounts. Make sure you and any other family members who manage finances know the log-in information and passwords for each online account.
If you’re not sure what accounts you have or if you can’t locate an old student loan or 401K, now’s the time to track them down. Visit AnnualCreditReport.com for a free credit report. It will list all of the accounts you have opened in your lifetime, including your loans and credit cards.
To stay organized, set up a financial work station in your home. Designate a folder, binder, or drawer for all important documents, pay stubs, tax returns, or receipts. Having one place for all things money-related can help you manage your accounts more effectively.
Week 2: Tackle your credit
In the second week, focus on your credit score, the accuracy of your credit report, and analyzing how much debt you have. If you haven’t done so already, get your free credit report and review it carefully. Look for inaccuracies or fraudulent activity, as these issues can significantly impact your credit score.
If your credit score isn’t where you want it to be, focus on making a plan to improve it. You may find you need to pay down debt to raise your score. If you have a bad habit of missing payments, setting up automatic payments can ensure you don’t miss any due dates. On-time payments can help improve your credit over time.
Once you have addressed the immediate issues, you can come up with a strategy for paying down debt that works for you, such as the debt avalanche or the snowball method.
Week 3: Think about savings
Nearly half of Americans can’t come up with $400 in an emergency, according to the Fed. If you fit into this category, an unexpected car repair or medical bill could completely deplete your savings. You may have to turn to credit cards, personal loans, or payday loans to fill the gap. As a result, you can end up deeply in debt with high-interest rates.
If you don’t have an emergency fund, now’s the time to open a new account and start saving. If money is tight and finding money to set aside seems impossible, don’t lose heart.
Consider signing up for a savings app such as Digit. Rather than depositing large lump sums, smart apps monitor your everyday purchases and can automatically set aside small amounts when you can afford it. Those little amounts can add up over time, helping you establish savings.
Week 4: Create a budget
If you run out of money each month and don’t know where it’s going, use this week to get a handle on your spending and create a budget. Set limits on non-essential spending such as entertainment and eating out. By cutting out little extras, you can free up more money each month for debt repayment or your emergency fund.
You may have to make hard choices, such as cutting back on cable, putting a ban on clothes shopping, or only eating at home. But making those changes can have a big impact.
Once you have a budget and you’ve made cuts to your spending, evaluate if your income is enough to meet your needs. If not, think about how to increase your earnings. You could ask for a raise, switch jobs, or earn money from a side hustle.
Getting your finances in shape
Getting your finances organized and creating a plan for your money can be overwhelming. But during Financial Literacy Month, you can break up financial management into small, manageable steps to help get you on track.
For more information about financial literacy, learn how to manage money like a pro.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.50% APR (with Auto Pay) to 7.82% APR (with Auto Pay). Variable rate loan rates range from 2.43% APR (with Auto Pay) to 7.21% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.45% effective May 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.43% – 7.21%1||Undergrad & Graduate|
|2.43% – 6.65%2||Undergrad & Graduate|
|2.43% – 6.59%3||Undergrad & Graduate|
|2.44% – 6.87%4||Undergrad & Graduate|
|2.46% – 7.08%5||Undergrad & Graduate|
|2.93% – 9.67%6||Undergrad & Graduate|