April is not just about tax season and springtime. Since 2004, April has also been Financial Literacy Month throughout the U.S. Some states also recognize it, such as Arkansas, Oklahoma, Pennsylvania and Texas.1
This celebratory month began as Youth Financial Literacy Day, an effort to educate young people about key financial concepts that are often missing from schools' curricula. But as the awareness of this day expanded organizers realized that many adults might also benefit from these financial programs and activities.
Here are some ways you may celebrate Financial Literacy Month this April.
Check Your Credit Report
Everyone is entitled to a free annual copy of their credit report from the three main credit reporting bureaus: Equifax, TransUnion and Experian.2 Though these reports do not provide your actual credit score, they contain crucial information about the number and type of accounts you have open, the status of each, your credit utilization and other key metrics.
Reviewing your credit reports at least once a year may help you spot any fraud, such as accounts opened in your name that you do not recognize. You may wish to clear up any past-due bills that went to collections without your knowledge.
Identifying any issues before they cause additional problems, such as preventing you from qualifying for a mortgage or a line of credit, might be easier than trying to remediate them later.
Sign Up for Financial Literacy E-Newsletters
Although some aspects of financial literacy, like the importance of budgeting or responsible credit usage, are relatively evergreen, changing regulations on taxes and investments make it important to keep up with breaking financial news.
The Office of the Comptroller of the Currency (OCC) sends out a free Financial Literacy Update e-newsletter twice per month to highlight financial literacy events, resources, initiatives, and other ways to boost your financial knowledge.
Teach Children About Financial Concepts
Financial Literacy Month began as a way to give students a broader knowledge base on the key aspects of finances, including budgeting, investing, credit usage, student loans, purchasing a home and saving for retirement. A potentially impactful way to celebrate this themed month is by discussing these concepts with the children in your life.
Money might be a taboo topic of discussion, but there are many ways to impart financial concepts without delving into the specifics of your income or spending habits.
For younger children, this might mean price-checking items at the grocery store or working on completing a list of purchases without exceeding a certain amount of money. Older children may be more involved in the family’s purchasing decisions. Minors who have some earned income in a particular calendar year may even be able to begin contributing to an individual retirement account (IRA) or Roth IRA.
When talking about finances with your children, it may be helpful to discuss some of the mistakes you made along the way. Hearing firsthand about your decision-making process has the potential to give young people greater insight into how adults handle financial dilemmas. With instruction and guidance from trusted adults, children may better navigate the complex world of personal finance.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
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