Financial Friday: Gain knowledge and skills to be able to make sound financial decisions by becoming more financially literate. Read this article to learn how to improve your financial decision making.

Financial literacy equips us with the knowledge and skills to be able to make sound financial decisions that will help us manage money more effectively. It includes the understanding of how money is made, spent, and saved as well as how to manage debt. People with appropriate financial literacy generally are better at making financial decisions and manage money better than those without training.

Hello everyone, I want to delve a little more in depth into one of the most helpful ways to understand and take control of your financial house.

If you’re like most of us, you received very little if any learning on the topic of personal finances when in school or college.  You were lucky if your parents or school class was forward thinking enough to teach you about saving in a savings account and then help you open one. The concept of compound interest and the time value of money was probably never discussed. However, it is pivotal in providing income, understanding potential growth, tax efficiency, cash flow, and a host of other financial goals.

You probably also experienced shell shock when you saw your take home pay from your first paycheck, your dwindling paycheck as a result of federal, state, local, and city taxes, old age tax, insurances, etc.

If all you know is how much is in your checking or saving account and you have a 401k  but not sure what it is invested in or understand economic risk, interest rate risk, time risk, ect. then you are not financially literate and it is literally hurting you financially. Here are 5 easy things you can do to improve your financial literacy today. And, it doesn't have to be costly, or time consuming.

Get Educated

Read newspaper articles, magazines, local/regional newspaper geared toward money matters are all great resources. Perhaps The Wall Street Journal. There are many articles online as well.

Understand how Cash Flows

"The Cashflow Quadrant" This refers to the four ways to make money - employment, self-employment, business and investing. If you are working, then how do you get the most out of that income? How do you look at the taxing of and all associated cost and exemptions? Are you taking advantage of them? The investing is often greatly overlooked. Saving out of income can in some ways reduce tax liability. And once you invest make sure you are investing in the right way to build wealth and Income. Don't just save in and never review.

Use Financial Management Tools

Attach Financial Management tools to your personal checking, savings, credit card and mortgage accounts. Tools like Mint, and Nerd Wallet are great ways to help you improve financial literacy. They will also help you manage your personal finances.

Get Expert Help

Ask for Expert Advice from an experienced advisor. This advisor can help you understand how to budget and save as well as how you are handling credit and debt and make recommendations to payoff, consolidate and manage finances with a plan to achieve those goals.

Use Your Network

Utilize your network to help achieve your goals. There are many podcast, e-books, blogs, seminars, and workshops that can help you and are very valuable. Please don't overlook or ignore the opportunity to gain expert advise from your immediate network, your circle of influence - successful friends, family members, CPA's, Financial Advisors/Planners and other networks that provide financial advice. Sometimes a question and answer session is all it takes to start on the road to financial literacy.

I can be reached to help you start this journey. And trust me, it isn't as difficult as it may seem. Most people feel liberated and more in control within only a very short time. And remember this is always a FREE resource for you.

Diahanna Vallentine, BCPA                                                                                                                                                 

diahanna@healthtree.org                                                                                                                                               

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