Financial Wellness Begins with Financial Literacy

Since 2004, April has been observed as Financial Literacy Month to raise awareness about the importance of financial education. Schools, human services agencies, financial institutions, and employers all play essential roles in improving the financial literacy of their students, communities, and employees.

Financial literacy simply means having the understanding, knowledge, and skills necessary to make informed and effective decisions on financial matters. Education comes in a variety of formats – workshops, newsletters, videos – and can cover a range of topics, from investing basics to budgeting to maximizing your company’s retirement plan benefit.

Employers that invest in financial education for their employees may find that employees’ have a better understanding and a greater appreciation of their retirement plan, which can boost participation and contribution levels. By participating in worksite financial education, employees may also find it easier to set realistic retirement goals.

Well-defined goals are essential for creating an effective financial strategy. The acronym S.M.A.R.T. is a helpful tool in developing your goals:

• Specific: be clear about what you want to accomplish
• Measurable: quantify your goals so you can track your progress and know when you’ve succeeded
• Attainable: take achievable steps
• Relevant: consider your current situation when determining how you’re going to achieve your goal
• Time-based: identify the amount of time it will take you to achieve your goal

Here’s an example of a S.M.A.R.T. goal:

• Specific: I will contribute 10% of my monthly salary to my 401(k) account.
• Measurable: Look back over the last 12 months. If you met your goal, it might be time to increase your contribution amount.
• Attainable: Automatic deductions from your paycheck to your 401(k) account make it easy to meet your goal.
• Relevant: Review your current financial situation to determine if you can comfortably live with 10% of your monthly salary going into your 401(k) plan.
• Time-based: Consider how much you would like to have in your 401(k) after a year or five years. When you reach the one- or five-year period, evaluate your goal and make adjustments.

Financial Literacy Month is an excellent opportunity to learn how small changes can make a big difference in your overall financial picture. The financial professionals at AssuredPartners Investment Advisors are ready to help you clearly define your SMART financial goals and implement a plan to attain those goals.