April is National Financial Literacy Month.To make progress in today’s economy requires an understanding of our financial  situation and careful planning, managing, and spending of the money we earn. During this month, make a commitment to do a  thorough assessment of your financial lifestyle so you can take advantage of available resources and tools to set goals to improve your financial health.  Following are  some points to consider to enhance your financial fitness:

Follow Your Money 

• Track where and how you, as well as others in your household, spend every penny and dollar. A spending plan or budget puts it all out there so everyone can focus clearly on reducing and eliminating debt as well as plugging spending leaks.
• Set short-term achievable goals that can be accomplished in three months or less. After you have success, set new longer-term goals that focus on financial security and sustainability for the future.
• When you know where your money is going, you will make better spending decisions based on needs instead of wants.

Stop Spending What You Don’t Have

• To learn the true cost of spending, set aside a week or more in which you do not use credit cards, or make ATM withdrawals unless they are free.  Only use cash.  When you don’t use credit cards or make unplanned  withdrawals from the ATM , you will be in a better position to resist compulsive and impulsive purchases.  
• Cash is the best budgeting tool you can use because once it’s gone, you stop spending. Unlike a debit card, where you may have to pay overdraft charges if you don’t keep a record of each transaction, or pay interest on unpaid credit card balances, when you use cash, there are no fees, interest, or overdraft charges. Cash can help simplify and  improve your spending habits. 
• Using a credit card is like getting a loan.  If you only pay the minimum, you may end up paying much more than you charged. 

Make Your Money Grow

• Pay yourself first by saving each time you get paid, get money as a gift, win money, or get a pay increase.
• Use direct deposit or other automatic saving options to make it easier to stick with this healthy habit.
• If you got a large tax refund this year, you may want to update the W-4 you file with your employer. Review your situation because the right balance may give you more cash now to meet financial obligations instead of waiting for a refund that does not earn interest.  Use the IRS withholding calculator to determine the best option for you.

Get Your Credit Report

• Your credit report, which outlines your loan and bill payment history, is used by financial institutions,  potential creditors, employers, insurance companies, landlords,  and others seeking to make decisions about your ability to repay debt, determine how much you will pay for a loan or service,  or judge how financially responsible you are.
• Get a copy of your credit report from each of the nationwide credit reporting companies, Equifax, Experian, and TransUnion, each year to check for errors, inaccurate information, identity theft, or other fraud.  When you review your credit report annually, you know exactly what others you give permission to get your report will find out about you. An accurate, error free  report also helps you negotiate the most favorable rates for loans or other services.  
• The Fair Credit Reporting Act requires each of the credit reporting companies to provide you with a free copy of your credit report, at your request, once every 12 months. Free annual credit report is the only legitimate site to get your free report.
• After you get your credit report, contact Fairfax County’s Consumer Affairs for guidance in understanding your report, or if you are unable to get a credit reporting company to remove incorrect or fraudulent  information. Since your credit report is your first line of defense against identity theft, Consumer Affairs offers workshops to help you detect and minimize your risk for identity theft.

Don’t Wait To Start

• For tips, tools, and information to keep you financially fit, 24/7, visit the Federal Trade Commission’s Money Matters, MyMoney.gov and the Consumer Financial Protection Bureau, where you can find information about applying for a mortgage, choosing credit cards, student loans or other consumer financial products. 
• By setting financial goals and using the tools and resources available now, you can build a clear path for a   future of worry free financial fitness.