finances, savings, budgeting

Tips to improve your financial smarts this National Financial Literacy Month 

April is National Financial Literacy Month and what better way to celebrate than to take this opportunity to review and upgrade your financial smarts.

What is Financial Literacy Month and why is it important? 

Whether you’re just starting out or have been earning your way for quite some time, it’s never too late to learn about saving and improving your financial outlook. Developing a budget and building financial knowledge is the foundation for a brighter future.

Learning about financial literacy is not only for adults either. National Financial Literacy Month places the importance of learning about finances and the tools to learn about them right in the classroom, too. No matter their age, putting the know-how and resources at children’s fingertips will give them the power to make smart decisions now and in the future.

What began with The National Endowment for Financial Education as Youth Financial Literacy Day in 2000 has evolved into a month-long observance supported by the Jump$tart Coalition called National Financial Literacy Month. Both the House and Senate have fully supported National Financial Literacy Month through joint resolutions and the U.S. Department of Education promotes the observance of the month as well. Most recently, President Joe Biden proclaimed April National Financial Capability Month and called upon all Americans to observe the month by understanding barriers to financial well-being, and taking action to build their own financial capability and assist others to do so as well.

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Photo by StellrWeb on Unsplash

Tips to improve your financial literacy

  1. Read and inform yourself as much as you can

As the old saying goes, knowledge is power. If you want to take control of you financial literacy the best place to start is at the beginning by hitting the books. Start reading newspapers or magazines that focus on money matters. Check out books and guides for beginners. Financial literacy is a skill, and like any skill it takes time to learn. Treat it like a school subject or a new hobby you want to master and absorb all the knowledge you can about finances and money matters. 

  1. Make a budget and record your spending

If you want to be savvy with money budgeting is key. Having a set budget will help you estimate the amount of income and expenses for a given amount of time. There are many different kinds of budgets so you may have a weekly budget, monthly, or yearly. You could even have all three! Having a budget will help you keep track of your money and expenses and prevent overspending. 

Additionally, to take this a step further, you can record your spending. Get yourself a nice little notebook or make yourself a spreadsheet and use it to keep track of all your outgoing money. Tracking how much you spend and on what will help you identify areas where you may be overspending such as takeout food or online shopping. Once you know your spending habits, you can then make efforts to improve them. 

  1. Develop a savings strategy

After learning your spending habits, you can now start curating a saving strategy that will work best for you and your lifestyle. Having savings is incredibly important, as we have all learned over the past year, because you never know when an emergency or disaster may strike. Since the pandemic hit, thousands have lost jobs and seen huge changes in their financial situations. By creating a set savings strategy you can help ensure that you will always have something to fall back on. 

Use your newfound budgeting skills to create savings funds such as an emergency fund, a fund for a certain goal, or even retirement. After reviewing your fixed expenses in your budget, decide on an amount that you can set aside each month to go toward your savings fund. Once you put it in your savings, forget about it! Over time you’ll be able to accumulate a solid savings fund for your future.

  1. Utilize financial management tools

If you need help getting started with managing your finances, financial management tools are a great addition. There is a wide variety of both free and paid tools in the marketplace that can help you manage your credit cards, checking accounts, savings accounts, and more. Take some time to research different management tools and find one that works for you and your unique needs.

  1. Ask advice from others or talk to a professional 

If you’re feeling overwhelmed about money, seek out the wisdom of others who have already mastered the art of financial literacy. A trusted family member or friend is a great place to start. You can also speak with a financial advisor, whose job it is to help you manage your money safely. An advisor can help you create a financial plan and guide you through many of the steps toward building financial literacy. 

savings 401K plan

Understanding how your 401(k) plan protects your children

savings 401K plan

It is culturally accepted that Latino children should take care of their aging parents; however, due to the last Great Recession creating high unemployment rates and the escalating cost of higher education, our children are facing already difficult challenges in taking care of themselves and starting their families. There is little room in that picture to fulfill the needs of aging parents.

Latino families used to have –and many still do– unspoken natural agreements in which grandma –or sometimes grandpa– would live at home to take care of the little ones and do home chores while the young couple would be working out of the house. Moving to another country, though, might have changed those rules. Our children move around for work or college, our extended family is not so extended any more –I know this because in the United States, my side of the family is my son and I, with a marvelous daughter-in-law and two adorable granddaughters.

Moreover, many aging Latinos live under the levels of poverty, depending exclusively on Social Security and their families to get by. The Pew Hispanic Center reports that older Latinos experience double the poverty rate than the general U.S. population age 65 and older, are more likely to rely on social security than other older adults, but are less likely to be eligible for social security benefits.


culture of poverty Latinos and social security

You can read, “La cultura de la pobreza, a stigma in minority communities.”



On the other hand, Latino families are many times compressed by the burden of an extended family sharing one roof, and the increasing cost of supporting two, even three generations with just a couple’s income. If you are in that situation, you are what I call the “sandwich generation.” You feel responsible for your parents but you have your priorities with your children. Been there, done that!

So I encourage you to start thinking a little about yourself and try to avoid this same conflict to your children. They already are facing a tough world out there! To start, let’s say you are working for a medium or large size company, and you have access to savings through a 401(k) plan. (If your company is smaller you might have access to a similar plan under a different name.) You never really paid attention to it because you take every penny you can home but now I encourage you to do.

What is a 401(k) plan?

According to CNN Money, “a 401(k) plan is a retirement plan offered to you through your employer. 401(k)s are the most common kind of defined contribution retirement plan.”

“Here’s how it works: You decide how much you want to contribute, and your employer puts the money into your individual account on your behalf. The investment happens through payroll deduction: You decide what percentage of your salary you’d like to contribute and, from then on, that amount comes straight out of your paycheck and goes into your account automatically, without you having to lift a finger. Your paycheck will be smaller as a result – though not as small as you might think, thanks to the tax benefits involved,” CNN Money explains.

In truth, there are a few benefits attached to this “forced savings plan.” You could be taking advantage of the benefits most plans include such as employer incentives, tax savings, and easy contributions. It is not that complicated once you understand the benefits, and it might not cost as much money as you think –in fact, you determine how much you want to save–, money that would eventually multiply overtime.

These are some of the benefits you want to find out if your company is offering:

  • Employer incentives: Companies typically offer these plans to encourage employees to stay in their jobs, and offer incentives for those participating in the plan. Companies sometimes match your participation up to a certain level. Not doing it is like giving up a portion of your paycheck!
  • Tax savings: You can save on taxes because you make a pre-tax contribution to most plans, which reduces your federal taxable income. You do not pay taxes on this money until you withdraw it many years later –and depending on your age and income, it will be a much lower tax rate.
  • Easy contribution: The plans are usually easy to contribute to. The money comes from your salary before it goes into your paycheck. You decide how much you want to contribute, and it goes directly into the plan after each paycheck you receive.

The numbers

As of 2014 (last year), you could contribute up  to $17,500 per year if you were less than 50 years old. If you were older than 50 you could contribute up to $23,000. Remember, every dollar you put in reduces your federal taxable income by the same amount.

This money is for your future and, eventually, to help your children at a difficult time. Even not being a burden is a way of helping them!

If take-home money is of concern, you might want to have a conversation with your family about it and plan your budget carefully so it will include these savings for your future. Then talk to your manager or human resource office to find out what options you have today.

Do not feel selfish for saving for your future. These plans and the laws that protect them were established to help aging Americans to have a well-deserved peace of mind after a lifetime of hard work.  Understanding why and making the decision to contribute today is one of the first steps towards avoiding stress and concerns in the future. There is not greater satisfaction than knowing you will take care of yourself when you’ll need it the most.

Thanks to Anthony Privetera, Financial Advisor at Morgan Stanley, for his guidance on writing this article.

Saving for life events

   You can read, “Financial planning a must to face life events”