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By: Charlestien Harris

April is the month that is known for the start of the spring season and National Financial Literacy Month. Financial literacy is defined as the ability to understand and apply different financial skills effectively, including personal financial management, budgeting, and saving. Being financially literate can make the difference between an individual being self-sufficient or totally dependent on others for information that helps them become financially stable. Today we will take a look at the five principles of financial literacy below – think about ways you can improve or change your personal money habits and try to create a healthier financial future.

1. Learn as You Earn

Understanding your pay and the benefits can help you to make the most out of what you earn. Learn to take advantage of your workplace benefits and your company’s match policy for your 401(k) account. Check the W-4 to see if your tax withholding amount is going to be enough to cover your end-of-the-year IRS tax obligation. Also, make sure you keep a close eye on your pay stub. Look for any changes like an increase in the cost of your benefits or taxes. This will affect your take-home pay and your budget if you are not careful.

2. Learn to Save and Invest

Establishing a savings account for future goals, like buying a house or preparing for retirement. Saving can help you to reach those goals faster. Creating a budget can help you start working towards your new house and retirement, even if you must start small. Investing is a subject that you need to do your research. Learn the terms of investing, the different financial products used to invest, and how much risk you can tolerate. I recommend that you seek a professional to help guide you through what can often be unfamiliar territory for many consumers.

3. Learn the Importance of Protecting Your Assets

It can be very costly when you don’t take the necessary steps to insure yourself and your assets in case of unexpected emergencies. This not only includes building an emergency savings fund but also making sure you have the insurance you need to protect your assets.  Learn the different types of insurance products available to cover those assets.  Replacement cost or actual cost are very important insurance terms that you should be very familiar with before you sign on the dotted line of an insurance policy. It could make a huge difference when you have a claim and need the insured items replaced because it was damaged or destroyed.

4. Learn to Spend Wisely and Sharpen Your Decision-making Skills

A great way to spend wisely is to compare your options. If you are considering making a large purchase, determine whether it is a need or a want and make sure you are living within your means. Determining whether you have a need, or a want is crucial to your financial stability. Needs are essential items for your survival. They include basic things like food and shelter.  Wants are non-essential items that you don’t need but that you feel will make your life more enjoyable. Learning to master the difference can make a huge difference in your financial success!

5. Learn the Borrowing Basics

Learning how to properly borrow money allows you to make essential purchases, like being able to send your kids to college or buying a home. When considering taking on debt, make sure you are prepared to handle it. Learn the terms and conditions of the loan and the details of repayment.

Factors the lenders will look for:

  • Proof of stable income,
  • Adequate savings,
  • A good credit history, and
  • Proof of any collateral (if needed) to secure the loan.

Remember not all debt is bad but you should learn the difference so you can stay financially fit!

If you’re feeling less than financially fit, don’t stress because statistics suggest that financial literacy levels vary across the United States with only a small majority (64%) of adults in high-income households feeling financially literate. Learning how to become financially literate does not have to be hard or difficult. There are so many resources available for you to access one being the Southern Bancorp financial library which can be found at

For more information about this and other financial topics, you can call me at 662-624-5776 or email me at  Until next week—stay financially fit!