Financial literacy is a term that seems to have an overwhelming effect on people. As soon as it becomes a priority, many times it’s because there’s already a problem. Trial and error from life experiences often leaves people with a load of credit card debt, and a little bit of insight into what “not to do” again. At weProsper, we want to change this. With our tool, iThryv Professor, we hope to empower and educate people before they commit to making financial decisions.
In the spectrum of financial literacy, there is so much content and complexity that often times an ambitious impulse to learn can lead to a sense of despair because of the breadth of the subject matter. However, like mastering anything, the best results tend to come from a stepping stone approach. In terms of financial literacy, one of the simplest things to do to start understanding your financial situation is to sit down and create a budget. Inside iThryv Professor, we have a Budgeting Widget, where you can completely customize input categories and time frames. You can create a budget that spans any length of time and has a level of detail that you control. Not only can you plan your spending, but you can update the budget as you make purchases to understand what spending power you still have available. As you reconcile your spending with your plan, you can see with pie charts how your spending has been distributed.
“Why a budget?” you may ask. The answer is fairly simple. There are those things we control, and those things we cannot. Within a typical month, most spending decisions are under our control, save our rent and utilities, but even then, there are tradeoffs we make (Do I want to afford the electric bill for keeping the house at 68 degrees Fahrenheit?). By sitting down and first acknowledging your needs (housing and food expenses), you can regain a full consciousness of how and why you spend money. Start simple. Then, as you become better at identifying and estimating expenses, you can add more detail. By understanding what we can control, we can plan for both the typical, but also the unexpected.
Budgeting can be a great exercise for the whole family. Have you considered helping your kids identify their wants, needs, and available money? While they may not understand the complexity of your budget, they can certainly begin to learn about earning, saving, and spending money, as you can show them the tradeoffs that one must make to live on a budget.
If you haven’t already, join our financial literacy community at www.weprosper.org. Take the time today to sit down and organize and plan your next week, month or year of spending with iThryv Professor. Be sure to put back a little for those unexpected expenses, and enjoy the rest of your July!
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