Understanding and Celebrating Financial Awareness Day
August 14th is fast approaching, which means it’s almost time to celebrate Financial Awareness Day. Check your 401k, watch that budget, and read on to learn why we celebrate being financially aware and how being financially literate helps you secure your future.
What is Financial Awareness Day?
It’s probably not a huge coincidence that Financial Awareness Day, August 14, is also the anniversary of the Social Security Act (SSA). The SSA was signed by President Roosevelt in 1935 and eventually established unemployment, retirement, and health care benefits, along with support options for the disabled and more. Both Financial Awareness Day and the SSA draw attention to the importance of financial health, giving you a chance to create a plan that helps you stay out of debt and enjoy retirement one day — instead of worrying about bills.
Another important aspect of Financial Awareness Day is to teach people at any level of financial literacy that managing your finances doesn’t have to be headache-inducing. Anyone can increase their financial standing and learn how to make sound investments for their future.
Celebrating National Financial Awareness Day
Now that you know what Financial Awareness Day is, let’s take a look at some of the best ways to celebrate.
- Create An Overview of Your Current Financial Health
Evaluate your current financial situation and make a list of all your current assets. This includes market value for savings and checking accounts, stocks, bonds, real estate, 401k, and other retirement savings. To get a good view of your overall financial health, you also need to list your debts, including any type of personal, mortgage, and student loans as well as credit card balances. Next, list all the sources of income you have, then evaluate your expenses. Your list of expenses might include the following.
✅ Debt payments
✅ Utilities
✅ Rent
✅ Cable/phone bills
✅ Food
✅ Dining out and other entertainment
✅ Travel expenses
✅ Fixed maintenance expenses
You’ll get a good overall view of where the majority of your money goes each month and find places you can cut back. You can add the ‘found’ money to your savings account or invest it in other assets. On the other hand, you may find you need an additional source of income to meet your future financial goals.
Either way, you’ll have a foundation to refer to and build on, just remember to update these lists as you pay off or add to your debts. That way, you’ll always have an accurate assessment of your financial health.
- Make Small Changes in Your Spending Habits
The smallest changes can have a huge impact on your financial outlook, and it’s better to get into the habit of keeping track of your spending early in life. Here are a few options to get you started.
Cancel Subscriptions You Don’t Need
Quit reading that magazine but still paying for it? Haven’t watched Netflix in over a month? Cancel the subscription and put that ‘found’ money in savings. Chances are you’d rather watch those monthly fees pile up in your savings account instead of wasting money on services you don’t really use.
Plan A Night Out
We all need a night out once in a while, but try to avoid stopping in at fast food (or restaurants in general) after work several times a week. Yes, it’s convenient and on the surface, it seems cheaper. After a while, it can put a dent in your pocketbook. The same goes for the local bar, movie theater, and other entertainment venues.
Instead of going out or buying takeout on a whim, plan your outings ahead of time so you know they fit into your budget. That also makes it easier to avoid overspending.
You can also look for alternatives to spending big on entertainment, like movie night in the park, going to see a band at a bar without a cover charge, two for one meal/drink deals, and more. All it takes is a quick internet search for free and cheap entertainment in your area or local restaurant deals.
Evaluate Your Needs Versus Wants
Do I need this or do I just want it? There’s a big difference and in the fast-paced competitive world we live in, it’s easy to want to keep up with the Joneses. Personal finance goals are different for everyone — there is no one size fits all solution. Before making any large purchase ask yourself if it’s a necessity or an impulse buy.
- Listen to an Investment/Finance Podcast
Podcasts are a dime a dozen but if you look, you can find excellent options for increasing your financial knowledge and discovering interesting investment opportunities. If you don’t know where to start, try one of the podcasts below:
- The Ramsey Show — An excellent podcast for beginner financial awareness enthusiasts. It offers actionable information on paying off debts, saving money, and more. The solutions they provide are practical for anyone who wants to get better at handling their money.
- The Investors Podcast — Okay, I cheated a bit on this one because it’s more a collection of podcasts than one particular podcast. You can find individual points of investment interest here. There’s something for investors at every stage. For example, you can listen to podcasts about investing in cryptocurrencies and real estate, or even investment strategies for different age groups.
- Money for the Rest of US — Straightforward, no-nonsense financial advice for even the most unaware. This podcast includes information on risk-taking on investments, how to make your money work for you, and more. The way the information is presented makes even advanced topics like Shadow Banking easy to understand.
- Start a Savings Account
Don’t shame yourself if you haven’t yet, you’re not alone. Around 19% of Americans save none of their annual income, and 57% of those who do save put away 15 percent or less. Not staggering numbers when you discover that 58% of us live from paycheck to paycheck in the US. What better way to celebrate financial awareness than to finally open that savings account?
The national savings account interest rate is currently 0.10% on average but some banks offer anywhere from 1-5% — it’s worth shopping around if you can. That monthly deposit can add up pretty fast too, and you don’t need to go crazy adding large amounts right away.
Starting small is better than not starting at all. If you can afford to put away more as your financial outlook changes, even better!
- Buy Stock in a Company
Already have your savings built up, debts paid off, have your mortgage on track, and insured to the hil? Do something new – try investing in something. It’s a pretty interesting rabbit hole to crawl down. In addition to the stock market where you can buy shares of larger companies like Amazon or Microsoft, other markets exist for investing in things like cryptocurrency.
Any investment carries some risk but some are riskier than others. Stable investments generally aren’t expected to fluctuate much and are considered a safer investment opportunity, these include certificates of deposit (CDs), exchange traded funds (ETFs), government bonds, mutual and index funds, and real estate. V
olatile investments, including oil and gas, futures, options, and initial public offerings (IPOs) can fluctuate greatly depending on the market. Your age, financial position, as well as risk tolerance will influence what you should invest in.
Either way, professionals recommend not putting all of your money into one type of stock and starting slow. Don’t invest a ton of money right out of the gate. While doing your own research can go far, you might also want to consider consulting a financial expert who can provide financial advice that will be tailored to your needs and situation.
If you want to see more information about investing and finance over the years check out The US Economic System: A Brief History, where we dive into the topic a bit further.
- Insure Your Home and Other Property
We invest a lot of money in getting our homes, furnishing them, having the latest gadgets, and making sure we have a working vehicle. These things need to be protected or it could cost thousands to replace them. Part of being financially aware is knowing how to protect what you currently own.
Just about everything in your house can be insured, whether you own or rent. Most renters don’t think about insurance for their property because they don’t own their home but it’s equally important to homeowners insurance.
One major tip for insuring property is to make a list of costly items in your home and then have them assessed to determine their current worth. This will make it easier to ensure you get the right amount of coverage. Not everything is worth covering but here is a list of things you’ll want to include.
- Expensive jewelry
- Electronics like computers, mobile devices, TVs, and appliances
- Collectibles of any value
Now, you may not want to pay that extra $9 a month to insure your mobile phone because ‘it’s just another fee’ but it can save you the cost of a new phone. With most mobile phones now costing anywhere from $300-$1,800, that’s nothing to sneeze at.
- Protect Your Identity Online
One thing that may not seem like a given when discussing financial awareness is protecting yourself against identity fraud. Much of the world accesses banking, credit card, and medical accounts online, meaning it’s easier than ever for cybercriminals to access your sensitive information.
Once they have your name, SSN, and address, cybercriminals can open up fraudulent lines of credit in your name or potentially access your private accounts. Over 40% of identity fraud victims in the US in 2021, said the incident happened after holiday shopping online. Luckily, you can protect yourself while accessing sensitive accounts and shopping online using the following tips:
- Only shop with companies that offer secure versions of their site. The URL should look something like this: https://www.thestorenamehere.com. These sites offer Secure Socket Layer (SSL)/transport layer security (TLS) for enhanced communication security.
- Create secure passwords for accounts. Creating a good password requires that you follow important password best practices. Avoid using your name, initials, street address, or repetitive sequences of the same number. Additionally, don’t use personal things that people would generally associate with you or could easily find out, like your pet’s name or your mother’s maiden name.
- Log out of accounts you’re not using. Try to avoid remaining logged into accounts after you’ve finished shopping or checking your bank balance, especially if you use several different devices. It’s convenient to stay logged into apps on your phone and computer but it also leaves an opening for cybercriminals if you aren’t properly protected.
- Use a VPN. Private Internet Access offers unhackable encryption and strong tunneling protocols to protect your data during transit. You even get protection against data leaks and location tracking with our Kill Switch if your connection to the VPN is dropped for any reason. A VPN is an easy and practical way to keep your sensitive online data private.
Protect Your Financial Future
Whether you decide to go it alone or get advice from a financial advisor, increasing financial awareness is an investment in your future. Learning healthy ways to manage, save, and invest your money, you create a game plan for financial success. You don’t even need to take a huge leap, just a step in the right direction.
National Financial Awareness Day is the perfect time to take the first step on your path to gaining financial freedom — or reevaluate where you are with preexisting financial goals. That said, you don’t need a special day to increase your financial literacy, any time is a good time to educate yourself.
FAQ
What is National Financial Awareness Day?
National Financial Awareness Day is August 14th, in the US. It’s time to reflect on current and future financial goals. This special day is dedicated to helping you develop good financial habits, so you can spend less time worrying about debts and more time on the things money can’t buy — like friends and family.
How can you celebrate National Financial Awareness Day?
Use some of the options mentioned above, or learn a bit more about the history of finance in the US. Financial Awareness Day is an excellent time to revamp your budget, educate yourself on finances, or even add an extra $100 to your savings account. Anything that promotes fiscal responsibility is a great way to celebrate.
What month is Financial Literacy Month?
April is Financial Literacy Month in the US and has been since 2003. Financial Literacy Month focuses on increasing your confidence while making financial decisions and building literacy about key financial aspects, including budgeting, saving, investing, and reducing debt.
In addition to National Financial Awareness Day and Financial Literacy Month, the US celebrates National Financial Planning Month in October.
What is financial planning?
It’s planning for your financial future, so you can enjoy your life and see results of your hard work. Some people build financial plans as long-term roadmaps to a comfortable retirement. Others use financial planning to reach short-term goals, like purchasing a vehicle or saving for a vacation.
The best part is, you can start at any age. Take into account things like unexpected emergencies, future goals, investments, debts, expenses, income, and other important financial data. That way, you can determine the best financial plan for you based on your personal needs.
