National Financial Awareness Day

Let’s end the taboo around talking about money. 

National Financial Awareness Day is dedicated to taking stock of personal financial health and working toward these six popular components of financial wellness:

Creating a budget

  • Track Your Income and Expenses: Start by knowing how much money you earn and spend each month. This helps you understand where your money is going and where you might need to cut back.
  • Set a Goal: Determine what you want to achieve with your money, whether it’s saving for a big purchase, paying off debt, or building an emergency fund. Your budget should align with these goals. Use free tools like Cash Coach to keep on track. 
     

Building an emergency fund

  • Start Small and Be Consistent: Begin by setting aside a small, manageable amount from each paycheck. Consistency is key, even if you start with a small amount, like $20 or $50 per month.
  • Keep It Accessible, But Separate: Store your emergency fund in a separate, easily accessible savings account, so you're not tempted to dip into it for non-emergencies. A high-yield savings account or Money Market account can help your money grow while still being available when needed.
 

Protecting assets

  • Understand Your Coverage Needs: Identify the key assets you need to protect, such as your home, car, health, and income. Choose insurance policies that provide adequate coverage for these areas, considering factors like replacement costs and potential risks. 
  • Review and Update Policies Regularly: Life changes like buying a new home, getting married, or having a child can impact your insurance needs. Regularly review your policies to ensure they provide appropriate coverage and adjust as needed.

 

Reducing/eliminating debt

  • Prioritize High-Interest Debt: Focus on paying off debts with the highest interest rates first, like credit cards, to reduce the overall amount you pay in interest over time. This is often called the “avalanche method.” A balance transfer to a lower-rate card can help cut down on interest payments.
  • Avoid New Debt: As you work on paying down existing debt, try to avoid taking on new debt. Limit the use of credit cards and consider using your debit card for purchases to prevent accumulating more debt.
 

Saving and investing

  • Start Early and Be Consistent: The earlier you start saving and investing, the more time your money has to grow through compound interest. Consistently contribute to your savings and investment accounts, even if it's a small amount, to build wealth over time.
  • Align with Your Goals and Risk Tolerance: Choose saving and investment strategies that match your financial goals and comfort with risk. For short-term goals, consider safer, more liquid options like savings accounts or certificates of deposit. 
 

Retirement/long-term goal planning.

  • Define Clear Goals: Identify what you want your retirement and long-term future to look like. Consider factors like your desired retirement age, lifestyle, healthcare needs, and any major expenses like travel or supporting family. Clear goals help guide your saving and investing strategies.
  • Start Early and Save Consistently: The earlier you start saving for retirement, the more time your investments have to grow through compounding. Contribute regularly to retirement accounts like 401(k)s or IRAs, taking advantage of employer matches if available. Consistency is key to building a substantial retirement fund.