Beyond the Basics: Elevating Financial Literacy for Long-Term Wealth
Written by: Tucker Kiracofe
As we kick off the month of April, we celebrate Financial Literacy Month! This is a great time to expand your knowledge about personal finance, reflect on your current financial standing, and make a positive impact on your future finances. Let’s explore a few subsections of financial literacy.
Budgeting:
Having a budget is one of the most important aspects of financial literacy because it helps you prioritize savings and keep your spending within limits to meet your goals. Start developing a budget for monthly spending by outlining your essentials and non-essentials. This will help you identify how much income is required for fixed expenses that are stable and known, like mortgage and utility payments, and how much you can afford to allocate toward discretionary expenses, like dining out, without sacrificing long-term savings.
- Track your daily expenses for a month to get a relative feel for your spending habits.
- Have a parent, friend, or significant other hold you accountable for sticking to your budget.
- Utilize a budgeting template. This can assist you in breaking down your income and expenses and strategically allocating each dollar to spending and saving.
Investing:
- Stocks: Securities that allow you to own a share in a company in which you have invested funds.
- Bonds: Fixed-income securities that are loans from investors to borrowers such as corporate and government entities.
- Mutual Funds: A conglomerate of stocks, bonds, and other assets.
- Exchange Traded Funds (ETFs): A similar way to invest to mutual funds as they incorporate stocks, bonds, and other assets. However, ETFs trade like a stock as opposed to being based on Net Asset Value.
- Certificates of Deposit: A type of savings account, offered by banks and credit unions, that hold your deposit for a specified period of time, earning a fixed interest rate.
Retirement Accounts:
There are many different accounts that are available to save for retirement. 401(k), 403(b), ESOP, or profit-sharing plans may be offered through your employer and often provide valuable incentives such as employer matching and catch-up contributions that employees should take advantage of. Depending on your income level and employment status, you may also be eligible to make Individual Retirement Account (IRA) contributions.
Investment Allocation:
Saving:
Even though the millennial generation on average saved $12,004.87 in 2024, per a recent survey by New York Life, according to Bankrate in a 2025 survey, “19% of Americans have no emergency savings at all.” Saving is a cardinal component of having a healthy financial lifestyle. By setting aside adequate funds in your budget you can effectively manage your spending while also avoiding taking on unnecessary debt.
Emergency funds, or a “rainy day fund,” is money set aside to accommodate unexpected expenses. It is generally recommended that you have around three-to-six months’ worth of expenses saved in an account depending on your financial circumstances. It is important that the account and investment be liquid so you can access funds promptly when needed.
Financial Planning Strategies:
Young Professionals: Allocate time to establish a budget and create an emergency fund to support three-to-six months of expenses. Start investing at a young age to capitalize on compound interest over your lifetime. Use Roth IRA or Roth 401(k) accounts to take advantage of after-tax growth. Make sure to capture any employer-provided match in retirement accounts so you don’t leave dollars on the table.
Mid-Career Earners: Continue to increase savings, retirement plan deferral percentages, and utilize catch-up contributions if applicable. As income increases, refine your retirement contributions to maximize your pre-tax and post-tax contributions. Make sure your investment allocation reflects your goals and time horizon.
Retirees: Identify a withdrawal strategy that fits your needs while aiming to minimize taxes in the future. Consider whether a change in your investment risk profile is needed to meet your goals and preserve the wealth you have created. Ensure your estate planning documents are up to date and align with your financial goals.
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