Financial Capability Month: 3 Tips for Improving Your Finances

Ten years ago, National Financial Capability Month was first recognized in the United States.

The goal was to highlight the importance of being financially capable and encourage Americans to learn more about effectively managing their money. While there is much work to be done to help bring financial education to all, we are dedicated to providing you with skills and knowledge during National Financial Capability Month and beyond. Here's are three things you can implement to help your financial well-being: 

Discuss Finances with Family

To kick off Financial Capability Month, it's a good idea to get your family more comfortable talking about money. It is crucial to be on the same page as family members when it comes to finances, as it is one of the most common sources of stress. Whether it's once a month or more frequently, set aside time to talk about money topics, discuss budgeting/savings habits, and ask questions. From aligning with your partner on future plans and spending habits to instilling solid money principles with your children, the best way to teach financial education is to just start talking. PFCU has some helpful tips to help teach kids about money every step of the way.

Create Goals

The best way to take stock of your finances is by setting a budget. Understanding how to budget is a critical component of financial well-being. Make sure your income and expenses are always adjusted by updating your budget yearly at the very least. Calculate exactly how much money you have coming in every month and add up all of your monthly expenses, such as mortgage/rent, car payment, utilities, phone bill, etc. Once your essential monthly expenses are subtracted from your income you'll see exactly how much you have left to save and spend on your other wants and needs.

To keep your budget on track, set a list of financial goals. Laying out specific, measurable goals will make you more likely to stick to them. For example, if you want to make one of your goals to save for a mortgage, set your goal at exactly how much you want to save for it. Then, give yourself a deadline of when you want to reach that goal. From there you can figure out exactly how much you should be putting away towards that goal each paycheck to ensure you reach it by the deadline you set for yourself.

A more short-term example would be to reduce spending. To be specific with this, it could be as simple as saying you'd like to spend $20 less a week. From there you can look at areas where you can cut back on spending such as dining out, subscriptions or online shopping. Calculate what you have been spending on the area you choose to cut back on, and make sure you are reducing your spending to meet your goal.

Whether it is a short-term or long-term goal, making it specific and measurable allows you to see progress and will lead to improved personal finances.

Attend a PFCU Webinar

No matter what stage in life you are, there is always an opportunity to learn more about how to better manage your finances. PFCU provides a number of free classes and seminars every month that offer a variety of tips and strategies to help you get ahead. We cover many topics geared towards overall financial wellness such as taxes, saving for a mortgage, student loans, and much more. Check out our list of upcoming classes here to see if there is a topic that interests you. During Financial Capability Month our classes include "Homebuying 101: From Planning to Closing" and "Paying for College."

This Financial Capability Month, be proactive and take steps to help improve your financial education and well-being. By doing some of these tasks you can be confident that you're heading towards better overall financial health.