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Financial Literacy Month – Tip #29

We have come full circle and are back to where we began Financial Literacy Month on April 1! Starting the month, the first two tips were to track expenses for 30 days and gather February bank and credit card statements. Now, it is time to compare the two months of expenses. This tip will help highlight unnecessary expenses to eliminate and reveal additional areas to trim expenses.

Start by creating two categories, essential expenses and optional expenses and itemize expenses for each category. Next add five columns with the following headings: February, April, Savings, Trim, Eliminate. Note total expenses for each month in the appropriate columns, note the savings for the two months, and determine if you can trim or eliminate the expense. Below is a sample chart to get started:

ESSENTIAL EXPENSES FEBRUARYAPRILSAVINGSTRIMELIMINATE
Mortgage / Rent$$$$$
Insurance$$$$$
Auto Loan$$$$$
Credit Cards / Student Loans$$$$$
Utilities (garbage, water)$$$$$
Cell Phone$$$$$
Groceries$$$$$
TOTAL$$$$$
OPTIONAL EXPENSES $$$$$
Lunch / Dining Out$$$$$
Morning Coffee$$$$$
Gym Dues$$$$$
Memberships $$$$$
Movies / Events$$$$$
Shopping$$$$$
Housecleaner$$$$$
Kids (sports, apps, parties)$$$$$
TOTAL$$$$$

Throughout the month tips were shared on how to trim expenses. Compare the amount you paid in February to the amount you will be paying and add up the savings (one person I spoke with saved $2,000 a year by making the recommended calls). If you missed the tips, scroll down for the full month of tips.

Additionally, most optional expenses have been eliminated or significantly reduced during shelter-in-place. These little expenses can add up to costly annual expenses. Now is the perfect time to determine which of these expenses can be trimmed or eliminated going forward.

Shelter-in-Place has forced us all to hit the financial reset button. Taking the time to complete this monthly comparison, and trim and eliminate unnecessary expenses will help you reset financially and come out quarantine with a healthier financial mindset! 

Financial Literacy Month – Tip #28

With the growing number of data breaches that occur each year, it is important to understand the options available to protect your credit. Here are three ways: 

Credit Freeze –is simply just that…it freezes your credit and restricts access to your credit until you thaw/unfreeze your report. To freeze or unfreeze credit, you have to contact each of the three bureaus (Equifax, TransUnion, Experian) directly. If you have been a victim of identity theft or think your information has been compromised, this is the best step to ensure that no new accounts will be opened. This is a free service offered by all three bureaus and governed by Federal Law. 

Credit Lock – is a preventative measure to help protect your information. Available through the three credit bureaus, and other anti-fraud services, this step allows you to easily lock and unlock credit when applying for new loans or credit lines. This service may be at a cost, is not governed by Federal Law and depending on the service provider, may require the purchase of insurance to protect against any losses. 

Monitoring – also a way to prevent identity theft without locking or freezing credit. This service will send an alert when any inquiries have been made to credit. Monitoring is offered both with a fee and without. Be sure to check with your healthcare, insurance company and credit card companies, many offer this service free of charge. 

While setting up a service to protect your credit, it is also important to protect your child/children’s credit too. 

Regardless of the method, you have worked hard to earn a solid credit history, take the steps to protect it! 

Financial Literacy Month – Tip #27

Set aside one minute per day to review your financial transactions for accuracy.

Taking just one minute to review accounts will help identify suspicious or erroneous charges and correct costly errors in a timely manner. It will also help track daily expenses, identify unnecessary spending habits and allow you to make adjustments to stay within your budget. 

Seeing a daily transaction for a morning latte, lunch or online purchase could help eliminate little daily spending habits that add up to costly annual expenses. 

For example, if you buy a $4.00 latte every day, over a year that morning jolt adds up to $1,460! Talk about a buzz kill!

One minute, 60 seconds, provides financial peace of mind!  Start your timer!

Financial Literacy Month – Tip #26

Set Bite-size Goals

When working on financial goals (actually, all goals) be sure to include bite-size goals. Either sprinkle in small goals that can be achieved in a short period of time or break down larger goals into bite-size portions. 

For example, if your goal is to purchase a home in two years and save money for a down payment. Determine the amount needed for the down payment, divide the down payment amount by 24 months and break the goal into 24 monthly bite-size goals. 

Or, if your goal is to pay down debt by $5,000 in one year, divide the goal by 12 and pay $417 per month to achieve the goal. This method can be used for all goals…. financial, personal, professional or health/fitness.

Big goals can be overwhelming. Breaking goals into smaller chunks builds momentum, allows you to track progress monthly and keeps you motivated to achieve the big picture goal(s).