April has officially been recognized as Financial Literacy Month for almost 20 years. This month is dedicated to constantly improving your own financial wellbeing and personal education each year. Here are our tips on revamping and improving your financial wellbeing during Financial Literacy Month 2022!
Restructure Your Budget
If you don’t have a set budget, you need one. There’s no easy way around this one, so to really execute this effectively, get ready to put in some effort. You need an accurate look at your monthly expenses and you need to break everything down either on paper or a spreadsheet.
Pay special attention to “the little things” that have racked up over time, like subscriptions for streaming services, loot boxes, or magazines. These add up a lot after a few years of adding these types of things to your monthly bill, so start considering what you really want to keep versus cancel. After you figure out your monthly expenses (and the optional bills you’re going to keep), you can get much better bearings on the state of your wallet.
Figure Out Your DTI
Your DTI, or debt to income ratio, measures your financial obligations each month against your income. (Divide your ‘debt’/bills by your total monthly income.) This ratio will tell you pretty quickly if you’ve been living within your means. The ideal DTI according to professional recommendations is 43% or less.
Start Working on Your Credit
If you know your credit needs work, dedicate yourself to improvement. First of all, seek out ways to make repaying your debt easier (can you consolidate or refinance?)
Beyond that, make sure you make a payment each month. Most lenders will work with your income level so that minimum monthly payments are feasible. Don’t miss your payments ever, if you can help it, and actually communicate with your lender if you’re unable to make the full payment. Communication with the lender is always the best move, especially when you’re trying to improve your credit score and eliminate debt.
When it comes to saving money, especially retirement funds, have money automatically saved when you’re paid each pay period. If you don’t have eyes on that money all the time, you are less likely to spend it. See where you are with your savings and set up ways to start compounding what you’re putting away each month.