Financial Capability Month: 5 Steps to Ensure Financial Fitness

For many people, the topic of finance can be intimidating. With so many different words and concepts, it can feel unapproachable—but it doesn’t have to be. April is Financial Capability Month, which means it is a perfect time to dive in and learn about the value of financial education and how it can improve your overall wellbeing. 

The truth is, finance is for everyone. Financial capability is important because it can impact things like reducing physical and emotional stress, and allows you to make more informed decisions about your money. 

With that in mind, here are five simple ways that could help you to take your finances to the next level this month. 

1. Create a financial calendar. 

Take the time to create a visual representation of your expenses, both monthly and throughout the year. This way, you are prepared for larger expenses and can proactively save if needed. 

A good way to get started with this task is to gather all your bank statements for the past 12 months. Then, review your statements from last month and see the patterns of monthly bill due dates. 

Also keep in mind any major home projects, vacations, or insurance renewal dates that may occur in the future. Add those monthly bill dates and additional expenditures to the calendar. 

2. Review your spending habits. 

Take a critical look at where you spend money each month and determine if there are any financial habits that you would like to change. 

For example, how you shop at the grocery store could make a substantial difference in your monthly food costs. If you start to make minor changes to reduce food waste, that can save money in the long run. Implementing a weekly meal plan to map out ingredients you need to buy ahead of time can also be helpful. This way, you can limit the costly impulse buys at the grocery store. 

One spending habit that can add up quickly is your streaming subscriptions. Review your transactions in the past month, add up the cost, and determine how much you are spending on those streaming services. If it is outside of your comfort zone, it’s time to “cut the cord” on some of your subscriptions.  

3. Build finances into your routine. 

Finances are much easier to manage if you check in and adjust on a regular basis. Yes, this means facing the music about your spending habits. If you’re struggling financially right now, it can be stressful to look at your finances on a regular basis. (Let’s be honest—it can be stressful no matter what your financial circumstances!)   However, it is a good practice to build finances into a routine for yourself, no matter where you are on your financial journey. 

Knowing how and where you are spending your money can be a relief because it means you can look ahead and plan for the future much easier. 

4. Save for emergencies. 

Life throws us all a curveball sometimes. It happens. Creating an emergency fund can help reduce financial stress and avoid having to take out debt the next time an unexpected event happens. 

One way to do this is to automate your savings account. Set a savings goal for yourself and then start with small amounts. Having a separate savings account that is away from your everyday spending account will keep you from accidentally spending the money. Schedule automatic transfers to your savings account so that you can save without even thinking about it. Then, voila! Let the automated transfers do the work. You can rest easily knowing that your money is there if an emergency happens.  

5. Know your credit score. 

Reviewing your credit score regularly will help you to be aware of the factors in your credit report and fix issues as soon as they happen. 

Websites like annualcreditreport.com and Experian can provide your credit report and score without a negative impact on your credit. Checking your credit report is a good financial fitness practice so that you can correct errors, stop fraudulent activity quickly, and work to keep your credit score healthy. 

One glance at a credit report will reveal valuable insights on how you use credit. By monitoring regularly, you can adjust your spending habits to take corrective measures that can make a big difference for your wallet. 

Managing your finances is a lifelong process. Just remember to start small and work your way up. Hopefully, these tips will guide you on a path to financial success. After all, there’s no better time to get started than National Financial Capability Month.