Financial Capability Month: Steps to Improve your Financial Future

According to Forbes, it's estimated that more than half of Americans lack the financial skills and discipline necessary to pay bills on time, pay off debt, and set a plan in motion for the future. Financial literacy is such a major social issue that our government has designated the month of April as National Financial Capability Month.

The goal of this month is to help people across all generations and socioeconomic levels learn how to make better decisions so that they may achieve financial stability. The best way to develop these skills is through education. Whether you are well-versed in personal finances or just beginning your journey, here are some helpful tips and resources on how you can improve your financial intelligence to ensure a stable and successful future.

Stick to a Budget

A good budgeting goal to aim for is 50 percent of your income spent on immediate needs, 30 percent on wants, and 20 percent on savings and debt repayment. Although these percentages may vary depending on a person’s unique circumstances, they are ideal numbers to work towards.

Now, it’s time to track your spending, which will ultimately help you make wiser decisions. The more carefully you keep track of where your money is going, the more you will be able to identify whether or not you can afford to make a purchase.

One of the top budgeting myths is that it takes too much time to budget. That may have been the case in the past, but did you know there are digital tools available to help streamline the budgeting process? Blackhawk Bank’s Budgeting Tool makes budgeting easy, and can be accessed from online banking or mobile banking app. You can add multiple accounts from several banks or investment services, monitor and manage your cash flow, set goals, and view recent activity all in one place.

Pay Down Your Debts

Paying down your debts is a sure-fire way to ease financial strain. According to a recent survey, 38 percent of U.S. households have $16,000 in credit card debt.

While having credit cards can be helpful, especially if you are trying to build credit, having an excessive amount of debit without the capacity to pay it down can negatively impact your credit score. It is much more important to stay within your financial means to boost your credit and future spending power.

Grow an Emergency Savings

An emergency fund is just that: money set aside that is only to be used in a true emergency, such as being temporarily laid off or having an unexpected expense.

To calculate how much you should put into your emergency fund, add your monthly expenses and payments, then multiply it by three. Typically, you will want 3-6 months’ worth of your true expenses and debt saved up, so that you have enough cushion to get through a few months of not having an income.

Think About Your Long-term Goals

Now it’s time to start thinking about your long-term financial goals, such as purchasing a dream home, starting a college fund, or investing in the stock market. Once you have your goal in mind, determine how much you need to put aside each month in order to reach it. Having both short-term and long-term goals that reach across a few years will help you make better decisions now.

Another long-term goal that many people forget to consider is retirement, which everyone needs to be thinking about in order to ensure a secure financial future. To learn more about saving for retirement, click here.

Educate Your Kids

It is so important that adults receive the proper knowledge to be financially literate, and it is equally important that kids, teens, and young adults also understand what it means to make sound financial decisions. There are plenty of resources to help parents teach their children, such as By educating younger generations, we are setting them up for successful spending and saving habits.

Create a Plan

At Blackhawk Bank, our number one Core Value is “Be Obsessed Our Clients Success,” and helping our customers create a financial plan that will allow them to build a financial future is a part of that. Many people feel intimidated by narrowing down goals and putting a plan to action, but just know that you do not have to do it alone.

The team at Blackhawk Bank is here to help you navigate the planning process, including offering tips and guidance that will push you closer and closer to your goals. If you are interested in learning more about how Blackhawk Bank can help you, contact us today and set up an appointment with a banker.