How to Navigate Life's Financial Maze with Literacy Knowledge

Welcome to today's episode of the Wealthy After 40 podcast. I'm excited to talk about financial literacy today. So if you didn't know, Financial Literacy Month is April, and during the month of April, I will be hosting Bingo over in my Facebook group, All Things Personal Finance, to help all of those members, and if you are not a member and would like to join, we are going to expand So expand our knowledge on personal finance topics that usually are not discussed or supported, or if you do have information, you're more than likely listening to your friends, your family, and those who have a very, very small experience or understanding, and so to help everybody explore that more, I've created some bingo cards with some action steps and every bingo will be awarded with a one on one complimentary coaching session for 90 minutes to help you understand where your gap is. and help you get moving towards that. So why am I talking about financial literacy? Well, if you listened to my older episodes, there's one where I talk about the six steps that I used to get to financial freedom. And during that episode, I talked about how step six was the one that really served me well. And step six is basically where you increase your knowledge On personal finance topics. So increasing that knowledge of financial literacy. So what is financial literacy? Financial literacy is the combined knowledge and skills. Required to make responsible and informed financial decisions that contribute to a sense of financial security and well being. Knowledge of financial concepts like saving, investing, spending, and borrowing is the foundation of financial literacy. So that is what we talk about a lot. I know some of us still struggle in those areas. We're still trying to find out where our sweet spot is and what will work for us. But there's a whole other section of topics that could support you in your journey, on your journey. So, every topic is not crucial to everyone. So, we are going to talk about that. six different topics today. This definitely is not exhaustive, exhaustive, but it gets more of the common topics in there. Some information, hopefully listening to this episode and these six topics will give you a better understanding of how the literacy and the knowledge actually benefit you as a reader. in, you know, in those financial decisions, in handling of your money. So let me just name off the six so you know what we're headed for. And they are employer benefits, taxes, credit scores and reporting, retirement, insurance planning, and estate planning. All of these areas serve us, protect us help us with our finances. you know, increased finances protection of our money if we do have it and helping our loved ones at the time of our passing to be able to be protected themselves. So again, this list is not exhaustive and I am not going to be like quote teaching or telling you about each and every one, but just how they have an effect, what it is that you need to understand and get a takeaway from them. Maybe some areas you're missing. So the first one I want to talk about is employer benefits. I think this is one that's often misunderstood, overlooked you know, maybe not defined well or asked questions. So hopefully as I talk about this, it will get you curious. Cause obviously I don't know the benefit package of everyone out there. Right? I understand that some employers don't have benefits and I recognize that if that is not you, I'm sorry, but what is one action you could take? You can definitely explore a new. a new position if this is something that is crucial to you. That's definitely how we make our way. I've had clients that I've worked with who feel like they're stuck in their job for many different reasons and they're not potentially looking out for themselves. So that would be one area is maybe there is something out there you can find with employer benefits. Now, the second thing you might be saying is, I can, but they don't pay as much. The first thing I want to explain to everyone listening, Employer Benefits is a compensation package for you. So yes, it's not cash in hand. But it's definitely benefits that offset what could essentially be an expense. The biggest portion of employer benefits is typically our medical insurance. And that is a very large amount your employer pays. I, some people don't have to pay a premium. In addition to their employer and others do, but understand that if you were to go out on the market, the benefits out there on the, you know, on the marketplace for medical care is completely different. That is what I have learned in the last two years. While my monthly premium is not that bad, my deductible is a lot higher than it was. So making that trade for having a lower monthly premium allows me to save my money to cover the higher deductible. So really exploring First of all, with your employer benefits, what medical insurance means? And obviously I'm going to talk about insurance planning later, and this would definitely go in there. Having an understanding of how your medical plan works. Which hospitals can you go to? What does that mean? What is a cost difference? Be, you know, really explore that. But in addition to other benefits, there may be, for example, ask your employer, is there a list of places, vendors, you know, certain companies that give your your employer a discount to as an employee to that place. And if this is somewhere, you know, it could be restaurants, it could be actual purchasing from the wholesaler for like Vitacost or, you know, some of those places. And if that's not for you, that's not, but. Granted, get this list, look at it. If you're already shopping there or you've wanted something, for example, like the, I don't even know if Vitacost's the right name. I can't think of the one that I had access to at a very huge discount that was an expensive small appliance. So really explore that list. Ask them and find out that. Secondly, you are going to want to explore The FSA and the HSA. So flexible spending account. That one has to be spent by the end of the year. Typically, the one I would use this for is definitely if you have child care. If you're paying child care, go explore the FSA. You know how much you're likely going to pay in child care. Put that in the FSA tax free, so you're saving taxes right there. and paying it. But it does have to be used by the end of the year. That's why I would choose it for that one. It can also be used for medical, for pharmacy, for prescriptions, things like that as well. And your other option is the HSA, which is the health savings account. This one can carry forward. It can also be invested. So really talk with your employer. If you're coming up on. Open enrollment for your company, for your agency that you're working for, and you maybe have enough like a, an a health fair or, you know, benefits fair. That's what they used to call ours. Go and explore and ask. If you don't understand what all the benefits are that are available to you, go and ask. Make that list. And not that you have to learn all of them this year. Pick the one that's. you know, going to have the bigger impact or that interests you most and really understand it and take advantage of that. Continue to do that year after year after year. There's definitely going to be some life insurances in their access to, you know, different things like that. So I know some companies allow, computer purchases through the company at a discount so that if you need to support college, you know, a college student or something like that definitely a savings there as well. So, I highly encourage you to spend some time. It's not a fun place, I get that, but it's an area that can compensate you, that you're already allotted to. Oh, and I don't want to forget the big one. If your company does a 401k match, traditional or Roth, it does not matter. You should be taking that to the full extent. If you are only taking one percent of three percent, or you're only taking three percent of five percent, get it to that full max amount as soon as you can. Like I said, that's a compensation package and that's money in your hand later down the road. So go do that. Hey, Gen Xers. Imagine a life where you control your money instead of it controlling you. My four month signature program, the Financial Freedom Accelerator, was created to help you learn the basics of budgeting and saving so that you can live a life without debt, have your money work for you, secure your retirement, and build a legacy for your loved ones. Let's face it, spending hours of your time trying to figure out where your money went is not serving you well. But I promise you, you don't have to keep dipping into your savings every month to pay that phone bill. What you really need to do is head to my show notes and book a free 60 minute one on one budget breakthrough session so you're no longer burnt out from your budgeting attempts and instead, you'll be saving yourself time, money, and tears. And because you're part of my podcast family, when you book a free call with me and mention Wealthy After 40, you'll get a special 200 discount for my signature program, The Financial Freedom Accelerator. Head to the show notes now to book that call and enjoy the rest of the episode. All right, moving on to the next topic is taxes. You probably, not all of you, but you probably gather up your information, your W 2s, your other forms you received in the mail, everything that says tax form enclosed, and you head to your tax accountant, your CPA, and you give it to them. They might take a copy of your driver's license because they have to have that to file. They will ask you a few other things and they may complete them right then and there or you may be on your way. The thing I'm afraid you may be missing is the credits and exemptions that are allowed for certain situations, and if your tax accountant, your CPA, does not know you that well, they may not know to ask that. So, you know, I know reading tax information, IRS information. It's not easy, but learning it and exploring it, understanding what the basic credits are, earned income credit is one. You've got exemptions for child exemptions, those types of things. Go explore that. Here is one that I think A lot of people don't understand is that the federal standard deduction is upwards, if you're married, it's probably half this if you're single or filing separate, but it's upwards of 30, 000. If your mortgage interest is not even close to that, your CPA and tax accountant do not need that. That is not benefiting you. And you thinking you're getting a write off for that is not the way it is anymore because that just has grown so much. Now, one in few may be able to do that still, but not like it used to be. A second thing in there is for taxes. Another one is the retirement credit. If you are contributing to a 401 they will give you a credit on your tax refund or, I mean, not your refund, your tax return and support you that way as well. So learn a little bit. This is an area that yes, you're not going to want to digest everything, but I learned from my mom that. You know what? It doesn't hurt to learn those little areas, what those, you know, basically what's on a federal standard form. What do all of those exemptions mean? What do all of the incomes mean? And how can I better make sure I am taking full advantage? But also with this information, when you sit down with your tax accountant and your CPA, because I'm not saying you shouldn't go there, you can ask questions. You can, you're, you have the lingo, you may not be clear on it, but here you can sit and get curious with them, because this is their area of expertise, and say, hey, I was reading upon this, And I'm not sure what that meant. And have them educate you. Have them help you learn and help you grow and understand more. And then if you read something that you're like, I think I could maybe do this, then you get to talk to them and ask them about it. So all right, moving on to the next one, credit scores and reporting. So in the Facebook group, I will be doing a live on this one specifically because it is such a misconstrued. number. It is such a misconstrued element that I think it takes a lot of information to have a very good understanding of a credit score. Back in the day, yes, I'm going to date myself, right? And most Gen Xers, we did not have access to our credit scores through any companies. And those are close. They're not exact, but they're close. So I always, I really didn't know my credit score. For many years, I did not know my credit score. What I did know is that whenever I sat down with a loan you know processor or a lender, I was never denied. To me, that was more important than knowing a credit score. But credit scores are made up of five elements and thinking that you can change it overnight is a misconception that is so wrong. so out there. So if you are wanting to explore this more, come join me live. I will also be talking about how to obtain your credit report, reviewing that, and you know, how to handle the information on it, what to do with that. All right. Retirement. You know, as Gen Xers, we're getting closer. Some of us are already there, but we really need to understand Not that we just should be saving, but what number do we need? A lot of people are, you know, it used to be have a million dollars, you're good to go. Now it's like, okay, you have to have two million dollars and you're good to go. But if that's for people spending a certain amount, you really need to relate it to how much do you need every year and then essentially you times that by 25 and that's the number you need. So really understanding better what. what or how to get to your actual retirement goal. If you can pay off your debt and you don't have such a huge demand on your, you know, income, then you won't need as much. If you're one that's not going to travel and spend a lot, you know, that's, that's going to support you. Being able to retire and be on Medicare is another way to look at it. So really get a better understanding of All of the elements of retirement, and hopefully I will be doing a live on that in the Facebook group as well. But I've just polled all my members to see what areas will benefit them both, both, best. Excuse me. And yeah, we're going to just be talking deeper and getting a better understanding. Alright, the next one is insurance planning. Do you understand car insurance? Do you understand what a deductible means? How that works? I had a walking partner who her brother had gotten in a wreck, brand new, you know, vehicle, and he's like, yeah, I just paid 250 and they bought me a brand new truck. That 250 was his deductible. That was what he signed on for. Now, his monthly premium was probably a lot higher than the same individual with the same truck that had a deductible of 1, 000. So, understanding that choosing that deductible of 250, 500, I believe they let you choose a 750 000, that gives you, a lower monthly premium or yearly premium, however you pay that. And then you can keep that extra money. That's the way I view it, that extra money and grow it for yourself to protect yourself. So, you know, but the second thing with car insurance is, do you have enough limits? The thing that was, you know, just recent with car insurance, The increase in car value, and these brand new cars that are driving around, people are paying 30, 000 to 70, 000 and if you're only being covered with insurance for, you know, having a wreck at 25, 000, then you're lacking in that, you know, insurance portion part of your car insurance. So just understanding all of the elements. The rest of the insurance is going to be life insurance. Do you need a million dollars? Who's going to get that? How does that serve them? Really understanding that cost. Are you paying 250 a month that you don't have to have that amount? Can you reduce it down? You know, just really understanding how the insurances that you already have work and how you could better protect yourself, maybe at a lower cost, or keep more money in your pockets for it to grow. All right, the last topic is estate planning. This is definitely one that is probably talked about even less than money, right? I think somebody would rather talk about money than an estate plan. But with this, Do you have one? Do you understand the difference between a trust and a will? Do you need both? Does your state support both? How does that look? You know, I worked for the sheriff's office and I learned about a holographic will. This is a handwritten will that can, you know, pass probate on a will. Just as easily as if you have something as an estate and trust, I mean, not in a state as a trust. And so, you know, it's interesting to just learn and understand some of these elements, but take a moment to, you know, really start thinking about it. Are you helping your kids out? Are you prepared? Are you making it easier for them at a very difficult time in their life? So, you know, start thinking about that. That's another way to protect your money, to protect your assets that you have, and keep them within your family. So yep, financial literacy. It's a huge Huge area. It served me so well to be able to learn deeper into, you know, even the elements of how can I cut costs? How can I invest better? How can I be a better spender? You know, and then borrowing. What does that look like? I need to understand that. So start exploring some of these topics. to give you a better foundational knowledge so that when you go to the expert, you can ask them and make the best decision for yourself so that you're answering better their questions and that you're asking them more questions to really benefit you. So I hope you'll join me in the month of April in the All Things Personal Finance Facebook group, you know, doing the bingo, jump in there. Get registered so you can grab that bingo card with the action steps accompanying it and the instructions on how to submit the bingo with the giveaways and all of that is. So if you have any questions, please send me a DM on Instagram and I can definitely answer them there. Well, till next time, we'll see you later. Thanks for listening. Every week, my goal is to help you get one step closer to financial freedom and making confident decisions so your money starts working for you. Having a community of support is important to your financial success. I would love to have you join me in my free Facebook community, All Things Personal Finance. Inside this group, every live training, action challenge, and posts are filled with tips and strategies to help you progress to financial freedom. If you have questions from today's episode or want to learn more, follow me on Instagram at elevatefinances. If you're looking for personalized support to get your finances on track, check out my website at elevatefinances. us to learn more about how I can support you with one on one coaching. Thanks and have a wonderful day.