Most of us like to think we are financially literate, but there’s always room to learn. If you think setting up a budget should be your initial course of action, you could already be a step behind. Instead, the first questions to ask yourself are: why do I want a budget, and what do I want it to accomplish for me?
Many online tools are available to get your finances in order. The Motley Fool – a private financial and investing advice company – has a step-by-step process for setting up a budget, with an abbreviated version below:
- Ask yourself why you need a budget
- Assess your current spending habits
- Denote on a calendar all one-time and periodic expenses
- Total up all your income
- Set financial goals
- Make plans on how to stick to your budget
Blake Parks, a business development specialist for Oklahoma’s Credit Union (OKCU), says there is always something to learn about personal finance.
“I believe financial literacy can be achieved when a person understands how to budget and manage their money effectively,” he says. “It takes consistent commitment to using the resources available in order to achieve your financial goals.”
Parks says that financial planning across different age groups has some markers in common.
“There are similarities across all ages, but I see younger adults tend to focus on establishing and improving their credit score while also learning the importance of saving for an emergency fund, so they have stability when unexpected life events happen,” he says. “For someone later in their career, they tend to focus on paying off debts like their mortgage, and investing in their retirement plan so they retire comfortably.”
He adds: “One way that members establish or repair their credit is with a secured credit card, where the card is backed by a cash deposit upfront. It’s also important to know that 35% of a credit score is based on payment history.”
OKCU periodically offers free classes to the public, including one titled ‘Your Money Personality.’
There are many sources in Oklahoma to go to for a financial refresher course, or just to get back on track after a major change such as a graduation, marriage, divorce, retirement, new job or the start of a business.
A Personal Financial Literacy Page is available at sde.ok.gov/personal-financial-literacy. Some of the topics there include:
• Earning an income
• Understanding state and federal taxes
• Managing a bank account
• Understanding insurance
• Charitable giving
• Identity fraud and theft
OSU in OKC offers a personal finance class that can be taken as an instructor-led class for six weeks or self-paced over three months. Some of their helpful topics include:
• Knowing how to change your credit report
• How to keep good financial records
• Making the right investments