Financial Planning

Brewing Up Financial Success: Your Way to Smarter Money Management This Financial Literacy Month

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Did you know that April is Financial Literacy Month? Financial Literacy Month is a national campaign designed to bring more financial education to children and adults.

This April, let's blend the rich aroma of coffee with the essentials of financial education. At Coffeehouse Capital, we believe that managing your finances should be as enjoyable and habitual as your morning cup of Joe. Whether you’re just dipping your toes into the world of finance or you’re ready to refine your financial plan, here’s how you can stir up your financial knowledge and percolate some serious growth.

Blend the Perfect Monthly Budget

One of the most important steps in ensuring financial success is creating a monthly budget. This may sound simple, but a budget is your financial strategy's foundation.

Creating a monthly budget doesn't have to be complicated. Here's how to ensure you're setting yourself up for financial success:

  1. First, calculate your gross monthly income. This could include your salary, investment income, Social Security, child support/alimony, freelance work, or other income sources. Remember to calculate your net income as well, which is how much is left after taxes and other deductions.
  2. Speaking of priorities, consider your financial priorities and allocate your budget accordingly. In addition to your regular monthly expenses, you might decide to increase your general savings or earmark money toward a large purchase such as a home or car. The important point is to decide what's important and to make sure your budget reflects those values.
  3. Finally, create expense categories for where your money is spent and track each and every expense. It's important to differentiate between wants and needs. You need to pay the rent or mortgage payment, but you want a new pair of shoes or a nice dinner out. By tracking your spending, you can determine whether your budget is aligned with your priorities or if you should make adjustments to meet your goals.

Check the Temperature of Your Credit Score

If it's been a while since you checked your credit score, now is a great time to see where you stand. Your credit score is an important metric when considering your financial health and will play a larger role when you apply for loans, especially mortgages and car loans. If you have a higher credit score, you may qualify for lower-interest debt, which will save you money. The Federal Trade Commission provides information on how to request your free annual credit report.

Reviewing your credit report is important to ensure there aren't any mistakes or incorrect accounts assigned to you. If you notice something on your credit report that doesn't look accurate, such as a loan or credit card you don't remember opening, contact your financial institutions immediately. You can also file a dispute with the credit reporting agencies to report any false information you find.

Decant Your Investment Options

As you become more financially literate and feel comfortable talking about finances, you may consider looking into investments that are aligned with your goals. There are so many different types of investments, and working with a financial advisor can help you understand your options. You should also educate yourself on some of the most common investment types and vehicles, including:

  • Stocks ( Size, style, sector, geographic region, etc.) 
  • Bonds (Government, corporate, duration, credit quality, etc.)
  • Cash (FDIC bank and brokerage CDs, High Yield Savings Account, etc.)
  • Alternative Investments (Real Estate, Real Estate Investment Trusts, Private Equity, Digital Assets, etc.)
  • Mutual Funds (Watch out for high fees and tax inefficiencies) 
  • ETFs (Exchange Traded Funds)

Crafting Your Personal Financial Plan

Creating a personalized financial plan is like developing a unique coffee blend that suits your taste perfectly—it’s tailored to your financial goals and lifestyle.

  • Set Clear Financial Goals: Begin by identifying your short, medium, and long-term financial goals. Whether it’s saving for retirement, buying a house, or funding an education, clear goals provide direction and motivation.
  • Assess Your Financial Situation: Take stock of your current financial situation, including income, debts, expenses, and investments. Understanding where you stand is crucial for mapping out the path forward.
  • Develop a Strategy: With your goals and current situation clear, develop a strategy that includes saving, investing, and debt management plans. This strategy should act as a roadmap to help you reach your goals.
  • Regularly Review and Adjust: Just as you might adjust your coffee recipe to perfect its taste, regularly review your financial plan to ensure it remains aligned with your changing needs and circumstances.

Having a financial plan is vital because it provides a structured approach to achieving your financial aspirations. It helps you manage your money efficiently, prepares you for emergencies, and builds confidence in your financial decisions, leading to a more secure and enjoyable life.

Pour Over Questions with Financial Experts

Talking about finances can be intimidating, but we all must start somewhere. At Coffeehouse Capital, we believe that financial literacy isn't about making big leaps overnight, but rather, it's about making steady, deliberate steps, much like savoring your favorite coffee. Pick one of the strategies above and start infusing your financial practices with knowledge this month. Let’s brew!

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.