Financial Literacy Month is here

Individuals 03.22.2023 4 MIN

April is Financial Literacy Month, which encourages Americans to focus on investing in their financial know-how and better understand their finances. Many may be fairly new to the world of personal finance—it’s not a subject covered in many schools.¹ But don’t worry! Goldman Sachs Ayco Financial Wellness can help you learn the basics and evaluate your options over the course of your financial life.

So how can you maximize Financial Literacy Month?

Make a budget

To understand your financial picture, look at how much you earn and how much you spend. Making a list of your monthly bills is a start, but you should also look realistically at how much you spend.

This exercise helps you assess your needs versus your wants. Your rent or mortgage is a need. Your end-of-week dinner out is a want, even though after a long week you may feel you need it! The more detailed your budget, the more accurate it will be.

Establish an emergency fund

We’ve all heard that we should save for a “rainy day.” But often by the end of the month many people have very little left over. Small amounts can really add up, but it’s also easy to spend that end-of-the-month remainder.

Try putting that small amount aside in savings before you pay anything else. This system, known as “Pay Yourself First” is like a gift you give to yourself each month. If the rainy day arrives, you can use your emergency money instead of a credit card.

Understand credit cards, credit scores and debt

Establishing credit is important. But managing debt is important, too. When you purchase with credit and pay it off in a timely manner, you are establishing a track record of creditworthiness. This raises your credit score.

Higher credit scores help you to get lower rates when you need to borrow in the future. If you already have debt, making a plan to pay it down can save you money, as well as boost your credit score.

Evaluate your loan options

Loans, for most of us, are a part of life. After all, only a tiny fraction of people can buy a house without a mortgage! But not all borrowing is the same.

Learning how to compare rates and loan terms is an important part of overall financial literacy. If you already have loans at a higher rate, you may be able to negotiate a lower rate and save on interest payments. This is also true for student loans, which can also be refinanced.

Ensure you have insurance

Making a financial plan to care for your family in case you are no longer able to provide for them is another important part of financial literacy. As you work toward building a strong financial foundation, remember that life insurance, long-term care insurance and disability insurance can help protect what you’re building.

If you have Goldman Sachs Ayco as a company benefit, register, log in or download our Goldman Sachs Wellness app to learn more about this and other financial wellness topics.

¹https://www.financialeducatorscouncil.org/why-isnt-personal-finance-taught-in-school/

²Note: Any reference to an Internet site sponsored and maintained by third parties (the ”Site”) is provided solely as a convenience to you, and does not constitute an endorsement, authorization, sponsorship, or affiliation by The Ayco Company, L.P. or its affiliates. Ayco has not reviewed or tested any information, software, or products found on the Site, and therefore makes no representations regarding the content or sponsors of the Site or the suitability or appropriateness of the products or transactions described therein.