Financial Literacy Month: Start Your Financial Wellness Journey!
April is Financial Literacy Month and a great time to think about how to improve your finances. Whether you’re just starting out or looking for more advanced financial lessons, it’s never too early or too late to build healthier financial habits. Let’s look at a few of them to help you get on your way.
Find Your “Why”
What do you want your life to look like in 5, 10, or even 20+ years? Knowing this will help you develop your “why,” which keeps you motivated and committed to reaching your short-, mid-, and long-term goals. Whether it’s buying a house, going on that dream vacation, getting out of debt before retirement, or other goals, knowing your “why” is crucial to working toward your goals.
Reaching your goals takes time and dedication, but regularly putting money aside—even in small amounts—is the best way to watch your money grow. If you’re just getting started or not the best at setting money aside yourself, a great tool to consider is Cents to Savings. It’s an easy way to make everyday purchases part of your savings plan. Each time you make a purchase with your Arkansas Federal debit card, your transaction is rounded up to the nearest dollar, and the difference is automatically put into your Arkansas Federal share savings account.
You could also automate your savings to a set dollar amount, such as $20 a week. Over time, that $20 will add up to $1,060 in a year!
Establish/Raise Your Credit Score
A solid credit history, consistent with on-time payments, and a low debt-to-credit ratio are the keys to a higher credit score. And you’ll need a decent one if you ever want to get a loan to buy a home, rent a house or apartment, get a decent credit card, or even apply for certain jobs. In short, your credit score helps lenders, landlords, and even employers determine if you’re reliable.
A higher credit score can also open the door to the lowest available interest rate when you borrow. To track your credit score and learn ways to improve it, we encourage you to enroll in Credit IQ, a free tool for our members that allows you to get your daily credit score, monthly credit report, credit monitoring, and more with no impact to your credit score.
Lower Your Debt and Save
If you have a mortgage, it’s probably your biggest bill each month. Usually, your second largest payment is your car. Depending on your situation, it might be a good time to refinance your mortgage or car loan (or both). In other words, replace your current loan(s) with a new one for a lower interest rate or shorter term.
You could lower your payments and put more money in your pocket each month. You could even pay down debt faster.
Another option is a personal loan to consolidate your high-interest credit cards, loans, and other bills into one low monthly payment. You may be able to lower your interest rate or reduce your term, which can help you lower your monthly payments and/or pay down debt faster.
You may also want to see if you can reduce your insurance costs by comparing multiple carriers.
Let us help
These steps are simple, but these aren’t the only way to get on track. So, let us help you get started. As a member of Arkansas Federal, we’ll walk alongside you and help you evaluate your unique financial situation. Whether you want to map out a long-term strategy or just find a way to consolidate debt, our experienced team can help get your finances into the best shape possible.
Read Financial Planning: Helping You See the Big Picture
Read Teaching Your Kids About Financial Cybersecurity
Read Should You Get Pre-Approved Before Shopping For A Home?