Why Learning The Language Of Financial Literacy Is The Key To Reaching Your Financial Goals – Sponsored Content | Post and courier

Just like a second language, it is something we learn when we are children by hearing it speak at home. Maybe we see a dad balancing the family checkbook, hear a mom talk about a retirement plan, or catch up on conversations about college funds or paying credit card bills. The concept of financial literacy is something many of us are made aware of at an early age – but when it comes time to practice it as adults, we are often left adrift in a sea of ​​questions and questions. uncertainties.

“Like any language, you have to learn it and speak it regularly to be fluent,” explains Angelica Nguyen, Associate in the Financial Management Program at Grow Financial Federal Credit Union, which has two locations in the Columbia area. “Maybe we’re lucky and our parents taught us, or we went to a really good school. But for the most part, we probably didn’t hear much of this spoken language growing up. And when we become adults, we have to start speaking this language because we have to make financial decisions. But we have no idea if the choices we make make sense, as we are trying to speak a language we don’t understand.

Financial literacy – the ability to budget, save, invest, and pay off debt – is the backbone of financial stability. But according to Grow Financial, only about 58% of people say they feel comfortable creating a personal budget. Financial literacy is not just for the rich, but for anyone who wants to live within their means and plan for the future. As a credit union designed to serve not investors, but its members, Grow Financial offers training that can help members become fluent in the language.

“It just becomes part of your life,” says Nguyen. “It’s not something you learn once and let go. You have to remember how to do it again later. It is a constant process of learning, implementing, learning from that experience, then repeating.

The basics of budgeting

The foundation of financial literacy is budgeting – understanding how much money goes in, how much goes out and how much income is left. “It’s like a blueprint for a house,” says Nguyen. “It’s a plan of your financial goals and aspirations, and whether you can achieve them because you have that budget in hand. “

Budgeting requires weighing income against expenses, which go beyond essentials like utilities, groceries, or rent. Financial literacy also means including payments on loans or credit cards, subscription services, or even calculating how much is spent each month on restaurant meals or other forms of entertainment. This can be an eye-opening process – wait, did I really spend that much on take out last month? – but it is absolutely necessary to make sure that you are living within your means.

There are different ways to develop a budget plan. In a “zero-based” approach, you allocate all of your income to specific categories – think part for housing, part for groceries, part for entertainment – making sure your income minus expenses is equal. to zero at the end of the month. Zero-based budgeting can help you resist the temptation to overspend and pay off debt faster, but it can seem overwhelming for those who want more financial flexibility.

Another alternative is a “50/30/20” strategy, where you designate not specific dollar amounts, but income percentages for each expense category, eg 50% for most, 20% for reimbursement. debt and 30% for other expenses. . Grow Financial members can also take advantage of a budgets widget that helps them track where the money is going. Nguyen recommends budgeting, not based on gross income on a pay stub, but on the net amount minus insurance and taxes.

The secret of saving

Once you’ve figured out where all your money is going and how much you can spend, it’s time to give some serious thought to saving, whether it’s for a dream vacation or retirement. Saving is too often seen as an afterthought, Nguyen says, something to do with how much money you have left. “The way you could do better is pay yourself first,” she adds. “Every time you get paid, put a percentage you’re comfortable with in an emergency savings, retirement savings, or vacation account, leaving it as is before you do anything. other. “

Other ways to save include setting aside the money you receive or setting a savings goal and increasing it by 1 or 2% each year. Either way, try not to view saving as a penalty or an expense that doesn’t make you happy. “When you save up front,” says Jared Barr, senior vice president of marketing at Grow Financial, “you are investing in your own future”.

By saving and cutting unnecessary expenses, you give yourself the opportunity to make additional payments on debt like auto loans or credit card balances, or even look longer term and explore debt strategies. ‘investment. Some consumers set up automatic payments that funnel money to the mortgage company or 401 (k) account each month. Others enjoy the satisfaction of moving that money on their own, not only by exercising financial literacy, but by enjoying it.

“It’s a change in mindset – you are the one actively transferring this money,” says Nguyen. “There is a bit more self-involvement and responsibility involved with this. You went over there and did this thing, because you wanted to do it.

Grow Financial Federal Credit Union offers tools and programs that can help its members learn the language of financial literacy. Contact Grow Financial Federal Credit Union at (843) 285-4424, visit their locations at 805 Highway 378 in Lexington and 163 Forum Dr. in Columbia, or check their website at GrowFinancial.org for more information. Right now, you will receive $ 200 after you open a Grow Financial checking account and complete five transactions totaling $ 200 by February 15th.