Every Month Is Financial Literacy Month

April was officially financial literacy month, but as REALTORS®, we think every month should be financial literacy month. Having a good understanding of finances, budgeting, credit and debt management can help you set yourself and your family up for long-term financial success. This includes everything from saving for a new home and retirement to paying off credit cards and student loans. Here are some tips to help you sharpen your skills.

Saving for emergencies

The Washington State Department of Financial Institutions (DFI) says a good guideline is to set aside enough money to cover living expenses for three to six months. For example, if your living expenses are $4,000 a month, you should have $12,000 to $24,000 in an emergency savings fund. Living expenses include housing costs, food, insurance, vehicles, debts (e.g., credit cards, student loans, medical bills) and personal expenses (e.g., haircuts, clothes, gym memberships).

If three to six months of living expenses seems impossible for you to swing, set a specific goal and save toward it every month. You might also consider adding to your emergency fund with money you earn from a side gig or from working overtime. Every dollar helps. For ease of access, DFI recommends that your emergency fund be easily accessible, so save your emergency cash with your bank or credit union. That way the money is there when you need it.

Setting SMART financial goals

You have probably heard of SMART goals at work or school. Those same principles apply when considering your financial goals. When setting your short- and long-term financial goals, make sure they are SMART.


Let’s say you’ve set a goal of saving $4,000 between June 1 and December 31, 2022 toward your emergency fund. You will need to set aside approximately $572 per month to reach that goal. This goal is SMART. You’ve decided on a specific amount that you is measurable by looking at your bank statements. It is actionable. You can personally deposit the money in your bank account or have it deposited via direct deposit. If $572 per month fits within your current budget and means, even if you have to cut some nonessential spending, then it is realistic. And, it is timely! If you can keep up the pace, you will have $4,000 saved by the end of the year.

Paying off credit card debt

Credit cards are a great way to make major purchases, earn airline miles, and cover unexpected emergencies, but using them can become a dangerous habit if you use them too often. If you don’t pay off your credit cards at the end of each month, they accrue interest which adds up quickly. Also, if you use more than 30% of your credit limit, it will adversely impact your credit score and your buying power.

If you’ve accumulated credit card debit, write down the issuer of each card, the balance, minimum payment due, due date and interest rate. Set a SMART goal to pay off the cards with the highest interest rate first, and always try to pay more than the minimum due on your other cards. At the same time, develop new habits by not using credit cards for impulse purchases. And, pay off anything you’ve charged at the end of each month.

Whether you are saving for your first (or next) home or retirement, or just want to pay off debt, it is smart to stay on top of your finances, set achievable short- and long-term goals, and review your financial plan regularly to be sure you are staying on target.

Marti Reeder, Realtor, Managing Broker