April is Financial Literacy Month, making it an ideal time to review personal finances and build confidence in long-term goals.
Dave Nellis with America First Credit Union shared five essential steps to help people of all ages become more financially literate.
"Having the right tools and resources is essential, but also having the right mindset and the right knowledge," Nellis said.
The first step is knowing where your money goes. Nellis recommends tracking expenses for at least two weeks, including rent, transportation, groceries, utilities, and online purchases.
"Most people don't have an income problem. They have a, my money is going everywhere problem, a spending problem," Nellis said.
The second step is building a starter emergency fund. Nellis noted that national statistics show 40% of individuals only have about $500 for an emergency. He recommends starting with $500 to $1,000 before working toward saving one to three months of expenses.
"You don't want to let one incident turn into debt," Nellis said.
The third step is to stop letting high-interest debt win. Credit cards and payday loans are expensive due to high interest rates. Nellis suggests using the snowball method by paying off the smallest balance first while maintaining minimum payments on other accounts.
The fourth step is understanding the basics of credit. A credit score determines borrowing costs for homes, cars, and insurance. Nellis advises paying bills on time, keeping credit card usage low, and avoiding opening multiple new accounts at once.
"You don't have to have perfect credit, but just good smooth, steady, consistent, conservative habits will definitely help you build your credit," Nellis said.
The final step is investing for the long game. Nellis recommends taking advantage of employer 401(k) matches, calling it free money. He emphasized that saving is for short-term goals, while investing is for long-term growth.
"The winners are those that are conservative and they make regular contributions and they have the patience," Nellis said.
America First Credit Union offers free financial counseling and investment services to help individuals set up a financial plan.
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