Six Ways to get better with your finances
Thinking about buying your first home or starting a business? Major financial decisions like these require careful planning, the right resources, and a solid support system. Yet, many Americans struggle with financial literacy. According to the National Financial Educators Council, a lack of financial knowledge cost the average American $1,506 in 2023.
At Omaha 100, we believe that everyone, regardless of income, should have the opportunity to build wealth. That’s why we provide access to capital and financial education or resources to help guide people on their journey of homeownership, entrepreneurship, and long-term financial success.
Research from the Financial Health Network among others, shows that individuals who actively manage their finances experience greater financial stability and less stress. Here are six key steps to help you take control of your financial future, backed by data and research insights.
1. Take inventory of what you have.
Getting financially organized is the first step in achieving financial confidence--and there are two major drivers: The What and the Why; know WHAT you have and have an understanding behind it (WHY).
Although it can feel overwhelming to get started, establishing categories can help you identify and organize your accounts and documents.
Here are a few examples of documents to keep track of:
Financial Management
Bank statements, credit card information, records of loans
Investments
Stocks and bonds, IRAs, savings bonds
Income Tax Information
Tax returns, supporting documents including charitable gifts
Insurance and Annuity Documents
Original policies and recent statements
Estate Documents
Wills, powers of attorney, medical powers of attorney, trusts, living wills
Legal Documents
Real estate settlements, birth/marriage/divorce records, passports
Employment and Military Records
Employee benefits, military service, and discharge papers
Home Records
Major renovation receipts, appraisals, list or video of home contents
Medical History
Doctors, current medications, allergies, summaries of recent appointments
Legacy Planning
Personal letter of instruction, family history, wishes for family members
2. Create a Budget That Works for You
Understanding how your income is spent, what your assets and liabilities are, what your benefits coverage is, and how your cash flow is contributing (or not) to achieving your financial goals is key.
A budget is one of the most effective tools for managing money, yet many Americans admit they don’t follow a detailed budget.
Start by tracking your income (all the money you make) and expenses (all the money you spend). Be sure to note due dates for bills, interest rates on debts, and variable costs like groceries and gas. Be sure to also include savings for future expenses, like a new phone, a car, or home maintenance. Studies show that individuals who budget regularly are less likely to fall into debt and have higher financial confidence.
Learn more about how to get started on your budget and stick to it with our partner, the Consumer Financial Protection Bureau. (consumerfinance.gov)
3. Pay Off Debt Strategically
Debt can make it harder to achieve financial goals, especially high-interest debt like credit cards. According to data from the Federal Reserve Bank of New York, U.S. credit card balances reached a record $1.17 trillion in the third quarter of 2024.
As of November 2024, the average annual percentage rate (APR) charged for credit cards was 22.80%, according to data from the Federal Reserve as reported by Yahoo Finance. This represents a significant increase from the average APR of 16.98% reported in November 2022. It's important to note that credit card interest rates can vary based on factors such as the cardholder's creditworthiness and prevailing economic conditions.
The bottom line is the longer you carry a balance, the more you’ll pay in interest.
A proven strategy is the debt snowball method, where you pay off small debts first, followed by larger debts. The debt avalanche method focuses on debts with the highest interest rates.
4. Save Money Regularly—Even in Small Amounts
A strong savings habit can be life-changing. A Federal Reserve report found that a significant percentage of Americans would struggle to cover a $400 emergency expense. An emergency fund helps you avoid relying on credit cards or payday loans when unexpected expenses arise. Financial experts recommend saving enough to cover at least six to nine months of living expenses to provide a financial safety net.
5. Understand That Wealth Grows Over Time
You don’t need to be rich to start saving. Even small contributions to a savings or retirement account can accumulate over time thanks to compound interest.
By setting aside money each paycheck, you create a financial cushion that protects you from unexpected expenses and moves you toward your short- and long-term financial goals, like buying a home or investing in a business.
6. Make Smart Investments for the Future
Investing isn't just for the wealthy—it’s a powerful tool for anyone looking to grow their money. Employer-sponsored plans like 401(k)s and IRAs allow you to save for retirement with tax advantages. Yet, a study by the U.S. Department of Labor found that only about 56% of private sector workers participate in a retirement plan.
If your employer offers a 401(k) match, take full advantage of it! This is free money toward your future. If you’re unsure where to start, speaking with a licensed financial advisor can help you make informed decisions about your unique strategy. Don’t have a financial advisor? Omaha 100 can refer a professional near you–call us at (402) 342-3773.
7. Keep Learning About Money
The more you know about managing money, the better decisions you’ll make. The longer you go without organizing your finances, the harder it becomes to get organized. A study published by the Global Financial Literacy Excellence Center found that people with higher financial literacy were more likely to save, invest, and successfully manage debt.
Financial education isn’t just for adults—teaching children and teens about money early can set them up for long-term success. You can learn more and find resources through FDIC.
Here to Help
At Omaha 100, we are committed to empowering individuals through financial education, home and business ownership opportunities, and access to fair and affordable financing. Our goal is to break financial barriers and create pathways to prosperity for all.
If you’re ready to take the next step toward financial independence, we’d love to help!
📧 Email: info@Omaha100.org
📞 Call: (402) 342-3773
🌐 Visit: www.omaha100.org
Let’s work together to create a brighter financial future!