Updates

Four Things You Need to Know About Money

Apr 27th, 2015

April is National Financial Literacy Month. The purpose is to remind Americans of the importance of being knowledgeable about financial topics and how to establish and maintain healthy financial habits.

Here are four basic finance lessons you can practice every day :

Budget – spend the money on paper first so you know where your money is going. Otherwise it’s going to leak out everywhere and you won’t have anything saved.

Pay yourself first – Put money away before you spend. You can tell yourself you’ll save what’s left, but you won’t do it. Make sure you’re contributing to your 401(k) or other retirement plan at work and that you’re contributing at least the amount that will get your employer’s full matching contribution. Then try to increase your contribution each year or when you get a pay raise or a bonus.

Discipline and sacrifice – The first two are all about the numbers. This one is about your behavior. You do not have to keep up with the Jones’. No one ever guaranteed you a new car every four years. Just because it’s paid for don’t run out and buy a new one with a new payment. Sock that extra money away. So what if someone else has the newer model.

We never learned in school that the $4 Starbucks three times a week is over $600 in a year. Or going out for a $10 lunch twice a week is over $1,000 a year. So sacrifice some, have some self-discipline and save some money for your future.

Don’t buy a new car – We’ve all heard the saying about how much cars depreciate the minute we drive them off the lot. Why do people keep buying brand new cars? You can save huge by buying a car that’s a couple years old and still low mileage. Let someone else take the depreciation. And when it’s paid off keep driving it. Put the money you were paying for the car payment into your savings or investments. You really don’t need the newest model.

Follow these guidelines and by next April’s National Financial Literacy Month you’ll be well on your way to good money habits that your future self will thank you for.

LD053298-04/15

Eli Lilly newsletter

Helpful financial information and tips delivered straight to your inbox.