April is Financial Literacy Month and while we are approaching the end of the month, there is never a better time to start improving your financial literacy than now. Being financially literate simply means understanding basic financial concepts that can help you better manage your money. Once you are financially literate, you will then be able to get out of debt, save more money, and even plan for retirement. So, if you feel as though you are not as financially literate as you would like, how can you improve? The best tips for financial literacy for anyone living in South Florida to follow are found below.
Get Health Insurance
Medical expenses can easily break the bank. In fact, the leading cause of bankruptcy in the country is medical expenses. If you do not currently have health insurance, now is the time to change that. HealthCare.gov is a great place to start finding the right health coverage for you and because of COVID-19, enrollment will be open until August 15. If you do not get health insurance before that date, you may have to wait until you get married, move, have a child, or lose your current coverage.
Learn How to Create a Budget
Budgeting is one of the most important financial skills you could have, yet so many people do not understand how to create one. When you have a proper budget, you take control of your money and can decide how to spend every dollar you earn. A budget simply helps you balance the money that comes into your account with the money you have to pay.
To start creating a budget, simply list all the income sources coming into your household. Then list your expenses, both those you pay on a monthly basis and others you do not pay as often. To do this, it is sometimes easiest to review your bank and credit card statements for the previous three months and categorize the expenses into groups of groceries, auto costs, and utilities. Do not forget to add expenses you do not pay every month, including auto insurance or property taxes. A common mistake is to not leave enough room to save and invest in the future, and these items are just as important as your income and expenses.
After you have created your budget, your bills, expenses, and savings should equal your total income. If the number you arrive at is more than you make, you may have to make some difficult decisions about the expenses you can eliminate or reduce.
Save for Emergencies
Investing in health insurance is a great way to ensure you are prepared for emergencies, but it is not enough. What will happen if the roof on your home needs repair or replacement, or if your car suddenly breaks down and needs an expensive replacement part? Too many people put off saving for emergencies because they do not think they have enough money to put into an account at one time. That does not matter. Even if you can only afford to put $25 in an emergency account, it is better than nothing. You can then start to build up to having the recommended three to six months of expenses in your emergency fund.
Manage Your Debt
Yes, you do need to include your debt as part of your budget, which will help you manage it. However, there is a bit more to it than just including it within your budget. If you cannot properly manage your debt, you may be subject to wage garnishment and other consequences that will make paying for your daily expenses even more difficult. Creditors and debt collectors in South Florida have the right to file a lawsuit against you when they are trying to recover the money owed to them, and that is definitely something you want to avoid.
To better manage your debt, you first must understand how much you owe on personal loans, auto loans, credit cards, and any other outstanding debt. Then, make sure you are paying at least the minimum amount on all of your debt. If you can, pay even more than the minimum amount while still leaving enough room in your budget for investing and an emergency fund. You should also determine which debt you want to pay off first. For many, this is the debt with the highest interest rate, although others find starting with the smallest gives them the momentum they need to continue paying off other debts.
Many people are still under the misconception that investing is only for the wealthy, but that is just not true. There are many ways to invest today and while stocks and bonds may seem attractive, it is important to fully understand any investment you want to make. Sometimes, reaching out to a professional can help you understand where your money will work hardest for you.
Save for Retirement
It is true that if you invest well, those investments could help you during retirement. Still, it is important to have a separate retirement account you can count on, particularly if you think the investment you made is at all risky. If your employer offers a retirement option, this should be your first choice. Some employers will match any savings you put towards retirement, which could help you grow your fund that much quicker. Certain retirement accounts, such as 401(k)s also bring tax advantages, which could save you even more money during tax time, which you can then put back into your budget or use to pay your debt.
Call a Debt Defense Lawyer in South Florida if a Creditor Takes Action
Legal actions taken by debt collectors and creditors can significantly harm you in the long run. If someone has filed a lawsuit against you to recover their debt, our South Florida debt defense attorneys at Loan Lawyers are here to help. Call us today at 954-807-1361 or fill out our online form to schedule a free consultation and to learn about the defenses available to you.