April is financial literacy month, a month focused on expanding one’s knowledge on a wide range of financial topics. Raising awareness on better financial decisions may lead to a more secure future. How? Perhaps by reading more, listening to podcasts, or experimenting with online financial calculators? These are all good steps; however, they likely won’t make a lasting impression. Why?
Here’s the thing about money, most of our decisions and habits are created by our experiences. You can read and listen in on diverse financial topics but how you act or react won’t be known until you face a real-life financial decision. What are the choices, tradeoffs, deadlines, and how does this impact you and those you care about?
Numbers and math may add up, but often conflict with our emotions. We’d all like to think we’re levelheaded and won’t be swayed. Not likely, emotions are real and influence our everyday financial decisions in more ways than we realize. That’s ok, here’s how to make the most of your choices and expand your financial literacy.
I’m biased and believe the key to financial literacy starts and ends with financial planning. Not a financial plan, but the ongoing act of planning. Planning is plural, it’s happening and taking shape in an evolving live process. It’s not a straight line and can be messy. As time passes, you should feel better about your decisions and have increased confidence. As your financial education compounds, you may be more informed on what matters (and doesn’t). Adding structure and accountability to your process increases the likelihood of repetition.
The process may begin by taking inventory of what you own and owe. Then assigning job descriptions to each account based on your priorities and a rough timeline. Finally, making decisions on where money flows based on your goals and what you want to accomplish. This includes creating your own financial plumbing system, so you’re directing your dollars with purpose.
Once a year, revisiting what you started and reflecting, do my current actions support what I want? You can accomplish this on your own or with your significant other, but often outside objectivity and viewpoints are worthwhile. Even more so as your wealth expands, and your time becomes limited. When the costs of being wrong increase, chatting with a professional may be helpful. This is where accountability can keep you on track.
Speaking with a CERTIFIED FINANCIAL PLANNER™ may provide confirmation you’re heading in the right direction. Blind spots can be highlighted, and experience shared so you feel better about your next steps. Today, all financial accounts from cash to investments are stitched together. Planning is like a wool sweater, when you pull on one thread, you’re pulling on them all. Having a professional vested in your family’s success may lead to better financial and life decisions. It’s your money, your time, your future, go make the most of it.
Full disclosure, I’m a CFP® professional. You can locate other CFP® professionals by checking out letsmakeaplan.org. Here you can prioritize your search by location and planning services. Another alternative is simply asking a friend for a referral. Who do they know, like, and trust regarding financial planning strategies? Why do they continue working with their financial professional in good and choppy markets? Reaching out and having an exploratory conversation may be valuable. After all, this should be a relationship that expands overtime built on mutual trust and respect. Feeling good about your financial planning experience expands your financial literacy.
Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Flowerstone Financial are not affiliated.