April is financial literacy month! Since 2003, April has been designated by the US government as the time when we should pause and reflect on our finances. As the start of Spring, April is a perfect fit. Between Spring cleaning and tax season, it’s a natural time to take a look at your finances and see if you want to make any changes moving forward. By improving your financial literacy, you’ll be better able to prepare for the future ahead.

Financial literacy is your knowledge around making personal finance decisions. Personal finance can be simple or complicated depending on your personal situation, but one easy place to start is to take a look at your assets, liabilities and income. Start with your assets - things like savings accounts, investment accounts, retirement accounts, and property you own like your house or car. Then take a look at your liabilities -this can include student loans, credit card debt or your mortgage.

Once you have stock of all of your assets and liabilities, take a look at your income and see how you are using to pay your living expenses and how you are allocating it between assets and liabilities. Once you have a grip on your assets and liabilities, you can see what areas need improvement and find resources to help you improve areas of weakness - this could be anything from budgeting to creating an emergency savings plan to altering your investment plan.

 that can help you to improve your financial literacy:

If investing is totally foreign to you, start out by learning about the stock market with our article, “

Normal Personal Explains the Stock Market

.” In this article, you’ll see that investing in the stock market is one of the most profitable ways to build wealth. A well-managed and diversified portfolio puts your money to work for you, helping to preserve your assets and helping them grow during your lifetime, rather than decreasing in value (inflation!).

When you’re ready to invest, you might need some assistance 

. Create a list of important personal goals that require money. This can be anything from buying a car to getting married, supporting your child’s gymnastics obsession to buying your parents a home, and beyond. For each goal, set a time horizon. A time horizon is a fixed point of time you give yourself to achieve the goal. For example, if you plan to retire in 35 years, your time horizon for retirement is 35 years. For each goal, estimate how much money it requires. This shouldn’t be an exact calculation, but it should be slightly liberal to account for future inflation. Magnifi Personal can help you to plan and stay on track to achieve your investing goals.

If you’re a more advanced investor who wants to develop new skills to evaluate investments, you might be interested in learning more about 

. Financial ratios are metrics that can help you to understand a company's fundamentals. For example, price to earnings (P/E) tells you how much you would have to invest in a public company or fund to receive $1 in earnings. P/E is one of the most common financial ratios that investors use. They can vary dramatically based on market performance. For reference, at the end of 2022, the S&P 500 Index had a P/E of 19.65 and the Dow Jones Industrial Average (DJIA) had a P/E of 21.13 (1).

If you’re ready to seek outside help with your finances, you might be deciding between using 

a robo advisor, an AI investing assistant or a financial advisor

. Each approach has pros and cons, and this article helps weigh the benefits and drawbacks of each. As a quick overview, with do-it- yourself investing supported by AI assistance, your investing strategy is totally self-directed. With a robo advisor, an algorithm chooses your investments for you based on your goals and risk tolerance (for example: low, medium, or high risk) and you have limited control over your investment choices. With a financial advisor you pay a higher fee for a professional, getting a small part of their focus and energy.

Financial literacy isn’t something you can achieve and stop thinking about. Your personal finances are dynamic (you might receive an inheritance or lose a job) and there are changes in the economy that can affect how you save and plan for the future. By taking some time in April to look at your personal finances, you can assess your current situation, see if you want to make any changes, and plan for the future. There’s no better time than now to shape your financial future!

1 “P/Es & Yields on Major Indexes” The Wall Street Journal, 

https://www.wsj.com/market-data/ stocks/peyields

Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.

Indices are unmanaged and investors cannot invest directly in an index. Unless otherwise noted, performance of indices does not account for any fees, commissions or other expenses that would be incurred. Returns do not include reinvested dividends.

The Standard & Poor's 500 (S&P 500) Index is a free-float weighted index that tracks the 500 most widely held stocks on the NYSE or NASDAQ and is representative of the stock market in general. It is a market value weighted index with each stock's weight in the index proportionate to its market value.

The Dow Jones Industrial Average (DJIA) is a price-weighted average of 30 actively traded “blue chip” stocks, primarily industrials, but includes financials and other service-oriented companies. The components, which change from time to time, represent between 15% and 20% of the market value of NYSE stocks.

April is Financial Literacy Month

April is a great time to evaluate your finances and improve your financial literacy.

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