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NEW YORK ( — April is Financial Literacy Month. As you await your tax refund, this is a good reminder to review your financial health and make the necessary changes in the way you manage your money.

Every household is affected directly by finances, no matter how much money its members make. Often, it is worries over finances.

According to the 2013 Financial Literacy Survey sponsored by the National Foundation for Credit Counseling, 77% of respondents admitted to having financial worries. In addition, 57% of Americans indicated worry over a lack of savings and 43% worry about not having enough "rainy day" savings for an emergency; 38% are concerned about retiring without having enough money set aside.

Saving money is a concern for the majority of Americans, but 40% of adults in the United States gave themselves a grade of C, D or F on their knowledge of personal finance. The majority feel they could benefit from additional advice and answers to everyday financial questions from a professional.

Here are financial management tips for each stage of your life:


Start saving now. Teenagers get money for birthdays, allowance and jobs. At this early age, they should develop the habit of putting money into a savings or investment account, even collecting loose change to add to this. Over time, small sums grow with interest.

Make a budget. Budgeting is important, even for teenagers. This is the time for them to start paying for entertainment, clothing and cellphone bills. They should keep a list of every expense, no matter how small, so they know where their money goes. This will make them think twice about the importance of each purchase.

Young adults

Young adults are carrying less debt than before the start of the 2008 recession, primarily because they own fewer major assets, according to recent analysis from the Pew Research Center. The share of younger households with debt of any kind dropped to 78%, the lowest level since the government began collecting this data 30 years ago. The share of young adults with credit card debt dropped to 39% in 2010 from 48% in 2007. Debt from student loans was the only major type of debt to increase. It accounted for 15% of the total debt for young adults in 2010, up from 9% in 2007.

Save and invest. For single people or married couples without kids, this is the least expensive time of life. They have a job and are finally making money, but they have to be smart with how you use it. They can spend it all on clothes, cars and entertainment, or wisely and save for the future. Young adults may have just graduated from school, but this is best time to plan for retirement. Maximize retirement accounts; even though the stock market is volatile, time and compounding growth are on their side.

Pay down debt. Some may be starting out with significant student loan debt; 40% of people under 30 have outstanding student loans, and the average outstanding student loan debt is $24,301. On top of that, there may be credit card debt. This can be overwhelming, so there must be a plan to pay it off. Start with the debt with the highest interest rate and pay as much as you can above the minimum payment. If you get extra money as a gift, bonus or tax refund, use this as an extra payment on your debt. Clip coupons and take your lunch to work, and use the money you save to immediately make micropayments on your debt. The median outstanding credit card balance has dropped to $1,700 in 2010 from $2,100 in 2007, according to the Pew Research Center. Less than two in five U.S. adults (37%), or about 86 million people, carry credit card debt from month-to-month. This percentage has dropped every year since 2009.

Build up credit score. Test scores are behind them, and now is the time to focus on credit scores. This score is more important than any exam because it is how lenders judge you. Your credit score affects the terms and interest rates for all loans — credit card, mortgage and auto. The higher the credit score, the lower interest rates will be, resulting in more money consumers can keep. Payment history and how money is handled is so important that it may be used for apartment rental or insurance applications.


Full disclosure of debt, credit scores and financial obligations. Before the wedding, newlyweds must tell their partners about all of their debt, including a list of all student loans, car loans, credit card debt and even loans from friends and parents and copies of credit reports to verify all open accounts. One or both newlyweds may enter the partnership with debt payments that will drain away money they could be saving to help reach financial goals.

Joint or individual bank accounts. Will there be one bank account for all income and expenses, or will the couple start with three accounts — yours, mine and ours? A joint account is easier to manage and will prevent some disagreements over dividing bills, but decisions need to be shared. It gives each partner some control over their own spending. Couples tend to gravitate toward joint accounts once they add children and major expenses. If the choice is for separate accounts, there must be a plan outlining which account pays each bill before the first bills payments are due.

Save for college. The best time to begin saving for college is the day the baby comes home. There are college savings plans with tax benefits; look at state-sponsored 529 plans and educational savings accounts. Grandparents can also make contributions to college funds.


Inheritance and windfalls. There may be money from a home sale, inheritance or insurance payment. This is a great chance to pay off high-interest debt such as credit cards or auto loans. It is also a good time to fully fund an emergency account — six months of household income -- and put more money into a retirement account.

Teach children about finances. Children learn attitudes about money from their parents, so a good example should be set for kids on saving, spending wisely and charitable giving. Parents should take them shopping and show them how to compare prices, find good deals and walk away from a purchase because the price is more than you can pay. Open a bank account in their name and let them make deposits into their own account. Show them the interest they earn each month on their statement. Give them an allowance and let them make their own decisions about this money, paying for their own toys and games. This also gives them a chance to make mistakes with money. Help them understand that once money is spent, it is gone.

Preparing for retirement

Max out retirement savings. They may still be paying for your children's college education, but it is just as important for people to save all possible for retirement. Will retirement savings sustain someone retiring at 65 for at least 20 years? It is a good idea to save 10% to 20% of an annual income for retirement. Max out your employer retirement plans and Individual Retirement Accounts.

Pay off debt. It is easier to pay off credit card and other debt when there’s income. The New York Federal Reserve says 2 million seniors in the United States who are age 60 and over still have their own student loan debt. If you have credit card debt on multiple cards, select the card with the highest interest rate and pay as much as you can above the minimum balance every month. You can even skip dinner at a restaurant and immediately log in to your account to apply that money to your credit card.

Have a plan to make savings last. Today, seniors have a longer life and their retirement savings has to last longer. This may be difficult if their investments are still recovering from the recent financial turmoil. Developing a plan and a budget may require the help of a financial adviser. The FDIC provides some good information on how to help your money last after your last paycheck.