Latinos lag behind in learning the ABCs of financial literacy

LatinaLista.net — Time and time again, Latinos, as a whole, rank consistently low when it comes to financial literacy. Whether it’s creating a household budget, saving money or even knowing how to invest, most of us could benefit with either a few lessons or refresher courses, especially in these times when there are new rules regarding credit.

maximize-savings-easy-way-800X800.jpg

The U.S. government recently released their Five Tips for Good Financial Health:

Create a budget

Financial experts are the first to say it: The first step towards good financial health is having a balanced budget. A good first step is to write down all of your monthly expenses and make sure that you’re not spending more than what you make.

Once you have a budget:

Identify and eliminate nonessential expenses

Set aside money saved

Revise budget periodically to make adjustments as necessary
Have a plan to pay down your debt

Paying down debt is an essential part of good financial health. After all, money spent on debt is money not being saved for retirement or other investments.

The Federal Reserve has a calculator that can help you figure out how long it will take you to pay your credit cards depending on the interest rate and your monthly payments. There are also several nonprofit organizations that offer counseling if you have out of control debt.
Establish a long-term plan

After creating a budget and developing a plan to pay down your debts, financial experts suggest creating long-term financial goals. One of the most common of these goals is saving for retirement.

The Department of Labor suggests 10 ways to prepare for retirement, which include:

Getting familiar with the Social Security Retirement Plan

Contributing to an employer-backed pension or retirement plan, such as a 401(k), if available

Opening an Individual Retirement Plan, or IRA
Protect Your Investments

Insurance policies can help you protect your wealth. Home and auto insurance are some of the most common policies. But there are others you might consider, including disability insurance, life insurance and long-term care insurance.

Before purchasing an insurance policy:

Consider all your personal needs

Learn about insurance policies offered by your employer

Get at least two estimates

Make sure to take advantage of all available discounts

Write a Will

Financial planning goes beyond one’s life. By writing a will, you can legally protect your property and ensure that your wealth is distributed to your survivors as you planned and with the least taxation as possible.

Consumeraction.gov offers some tips on how to write a will, including:

Clearly establishing the fact that the document is a will

Naming an executor of the will. This is the person who will ensure that your estate is distributed according to your wishes

Signing the document in front of at least two witnesses

If you enjoyed this post, please consider leaving a comment or subscribing to the RSS feed to stay informed and up to date with articles delivered to your feed reader. Invite a friend to read news on LatinaLista.

*

*

Top