Financial Literacy Month: Record-high inflation makes financial review a necessity
FARMINGTON HILLS, MI (April 12, 2022) — Each April, our nation recognizes Financial Literacy Month. With record-high inflation and surging gas prices, there’s no better time to get one’s financial house in order. ‘Spring cleaning’ shouldn’t be limited to closets.
According to the sentiment survey conducted by The National Financial Educators Council, the average estimated money lost due to lack of personal finance knowledge was $1,389.06. The 2021 TIAA Institute-GFLEC Personal Finance Index illustrates a significant disparity in financial literacy among African Americans, exacerbated by the economic consequences of the COVID-19 pandemic.
GreenPath Financial Wellness, one of the largest nonprofit financial counseling agencies in the nation, stresses the need to periodically review your finances and seek help navigating budgeting, managing debt, and building up savings. GreenPath’s Inclusion, Diversity, Equity, and Access (IDEA) learnings show how strengthening financial literacy among people of color will help close the wealth gap and build financial resiliency. Through its grant from the United Services Automobile Association (USAA), GreenPath is helping 4,000 clients from communities of color and low-income military families increase their financial literacy, reduce their debt and improve their financial confidence.
“As situations change and needs change, it’s really important for everyone to regularly look at their finances,” said GreenPath CEO Kristen Holt. “Our Learning Lab resources in both English and Spanish provides people the informational tools that enable a better understanding of money for a healthy financial life. Our certified counselors and housing experts are available to work with clients one-on-one to address their specific needs. Most clients, after working with us, say they wished they’d called sooner.”
Holt recommends five steps to boost your financial health:
Review your budget and spending. Understand where you are financially — how much money is coming into the household and how much money is going out. Take care of the essentials first – housing, medicine, food, utilities, childcare and transportation. Keep a journal of all spending to uncover ‘invisible’ expenses such as that morning latte. See if housing expenses equal 25-35% of your monthly income, if about 20% of your monthly income is spent on food/variable purchases, and 10-20% of monthly income on debt payments. GreenPath offers various online resources to help with this process.
Build up a “Rainy Day” emergency fund. April showers bring May flowers. Try to save 1-3 months of expenses to have funds available in case an unexpected expense or a sudden change in income occurs. Pay yourself first by automatically transferring funds regularly from your paycheck into your checking or savings account.
Leverage your tax refund. It’s tax season. Use your tax refund to grow your savings, catch up on past-due bills, or pay-down high-interest debt. Check if you should increase your withholdings (the amount that your employer deducts from each paycheck for taxes) so that you don’t have to pay a large tax bill at the end of the year.
Guide the next generation. Model positive money behavior and share concrete steps with your kids on how to manage money. Play games like Monopoly or Life to help your child learn the importance of budgeting and planning for the future. Have your child rank ten things they want from most important to least important and strategize how they can achieve their wishes. Teach money management while grocery shopping with your child and actively explain your decision-making process. Check out GreenPath’s “Family Lessons About Money” podcast, where clients share tips and challenges for raising financially healthy kids.
Don’t go it alone. Reach out to a trusted nonprofit financial counseling organization like GreenPath. Everyone who contacts GreenPath receives a free initial financial counseling session with certified counselors who lend an emphatic ear, can look at your entire financial picture and help you develop a personalized plan. Contact GreenPath at 866-648-8122 or visit www.greenpath.org.
About GreenPath Financial Wellness
As one of the largest financial counseling agencies in the nation, GreenPath Financial Wellness has assisted millions of people with debt and credit management, student loans, homeownership and foreclosure prevention. Headquartered in Michigan, GreenPath and its affiliates work directly with individuals, banks, credit unions and employer partners across the U.S. from more than 33 locations and through phone access and online tools. GreenPath is a member of the National Foundation for Credit Counseling, Michigan Diversity Council, Texas Diversity Council, and is accredited by the Council on Accreditation. To learn more, visit www.greenpath.org or call 866-648-8122. Follow the nonprofit on Facebook and Instagram @greenpathfinancial and on Twitter @GreenPath.