Financial Strategies

A reminder to focus on financial literacy

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The United States Senate designated April as National Financial Literacy month in 2003. This was designed to highlight the importance of financial literacy and teach Americans how to establish and maintain healthy financial habits. 

The original intent was to focus on educating the youth about financial matters, but with millions of Americans facing financial crises, ranging from student loans to under-funded retirement, getting better educated on finances makes sense for people of all ages.

April tends to historically be a positive month for equity investors. Over the past 20 years, certain research indicates that April has actually been the highest performing month of the year for the S&P 500 Index, rising 1.7 percent on average.¹ However, a higher stock market may mean nothing to millions who do not have the financial basics covered.

Here are some basic guidelines to consider for financial wellness:

Build an emergency fund and keep it liquid. This helps you keep unexpected expenses off of your credit card and reduce high fees.

Have good health insurance and/or fund your Health Savings Account. Uncovered medical emergencies can result in bankruptcies in some cases.

Pay all bills on time and keep credit cards paid off each month. Your credit rating is very important for a job search, renting an apartment or any large purchase.

Shop interest rates across several vendors before making a major purchase that requires financing.

Pay yourself first by saving off the top of your paycheck, not waiting to see what is left. This is especially easier if you have a 401k or IRA you can fund monthly.

Build a financial plan to better understand how to save for the short-term and invest for the future. Identify your goals to target the right kind of investments for the time frame you need.

Understand your insurance policies, what deductibles you have and what benefits. This includes health, life, disability, elder care, property and liability coverage.

Review your strategy and your investments with your adviser regularly. This will help keep you focused on your goals and learn more about investing and proper insurance coverage.

Once you have the basics covered it is time to build your net worth. This requires time, diligence and proper allocation. Be willing to put in the time it takes to learn as much as you can. This is important so you make prudent decisions and can gather enough knowledge to see the importance of sticking to your plan.

According to a recent DALBAR study, self-investors often under-perform the S&P 500, making costly, uninformed decisions at the wrong time.² This is another reason why financial literacy is so important. Knowledge is power, and in this case, money. If April has historically been a good month on the stock market, try to ensure you are in line with your strategy and learn how to capture any potential benefits.

1Financial Advisor Magazine.4.2.19.April’s Bullish History by Ryan Detrick ²DALBAR Independent Research. March 2019

Patricia Kummer has been a certified financial planner and a fiduciary for over 30 years and is managing director for Mariner Wealth Advisors, a registered investment adviser. Please visit www.marinerwealthadvisors.com for more information or refer to the Investment Adviser Public Disclosure website (www.adviserinfo.sec.gov).

Securities offered through MSEC, LLC, Member FINRA & SIPC, 5700 W. 112th Suite 500, Overland Park, KS 66211.

Patricia Kummer

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