April brings more than possible rain showers. It also marks Financial Literacy Month in the U.S. Whether you’re interested in a quick refresher or seeking to learn something new, it may be worth the effort to brush up on some financial concepts that give you a broader knowledge base from which to make financial decisions. Here are several ways to invest in your financial education for this Financial Literacy Month.
Check Out the Library
With financial topics and discussions available in online articles, blogs, podcasts, radio, television shows and just about every other type of media, the library may be an overlooked resource for those seeking to improve their financial literacy. However, it may be cost-effective to check out a book from the library since it is free. Your librarian may be an invaluable resource for identifying areas of knowledge that you would like to boost and helping you select the appropriate books to read.
Think About Your Budget and Taxes
Whether you are good at budgeting or tend to take whatever comes financially, spring presents an opportune time to take a hard look at your income and spending and decide what changes may be worth making.
While gathering the information you need to file your income tax return, you may be able to identify patterns and get an early start on any changes you would like to make this year.
For example, if you did not contribute to a 401(k) or traditional individual retirement account (IRA) last year, running a few calculations might help give you a good idea of how much you may save in taxes by starting contributions now. Suppose your overall tax rate is quite low due to other credits and deductions. In that case, it may be worth talking to a financial professional to see whether contributions to a Roth IRA or Roth 401(k) are better for your situation.
Enroll in an Online Course
Online courses and seminars were already popular pre-pandemic. Today, many are pursuing a degree or just seeking additional knowledge by taking classes through the internet. With many financial literacy courses available, if you would like to brush up on a few key concepts or prefer a basic economics course, there are plenty of options to consider.
Beware of FOMO and Get Rich Quick Schemes
In 2021, meme stocks and crypto bubbles made millionaires of some, while others lost it all.1 Many meme stock investors are relative newcomers to the stock market and, as a result, may have passed on misconceptions and misinformation to others. But the fear of missing out (FOMO) of previously unheard-of gains is real and has led many to pursue more risky trading strategies like puts, calls and excessive margin trading.
A key part of financial literacy involves assessing the quality of information you receive. Even the strongest companies are not impervious to catastrophe. Any investment that promises high percentage returns or indicates that even the worst-case scenario is positive should prompt further investigation before investing. If an investment sounds too good to be true, there may be a good chance it is.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual security. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by WriterAccess.
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