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Spring Clean Your Finances for Financial Literacy Month

Written by:
Financial Literacy Specialist

Organization is key as Americans work to recover during the economic downturn.

April is National Financial Literacy Month, a month dedicated to raising awareness about the importance of financial literacy. So, starting this Friday, organizations like Consolidated Credit will begin promoting tons of free resources you can use to improve your financial outlook.

“Now more than ever, we’re seeing how crucial it is for Americans to understand personal finance so they can navigate financial crises effectively,” says Gary Herman, President of Consolidated Credit. “The past year has shown us that financial fundamentals like budgeting, having a robust emergency savings fund, and keeping credit card debt minimized are essential to maintaining stability.”

When is Financial Literacy Month 2022?

National Financial Literacy Month—renamed by the Biden administration as “National Financial Capaability Month—runs from April 1 to April 30. So, this year, this month of awareness begins on Friday, April 1, 2022. It will run through April to Saturday, April 30, 2022.

Financial confidence in 2022

At the start of 2021, Americans were feeling positive about their financial prospects. A Consolidated Credit survey found 93% of people were optimistic about their finances. Consumers were looking to use the last round of stimulus to pay off credit card debt (40%), catch up on bills (27%) and build emergency savings (29%).

In 2022, with most government relief programs ended or ending soon, a similar survey from Bankrate finds people are less positive. Of the 2,450 adults polled, only 32% have a positive financial outlook, while 26% believe their financial situation will get worse this year.

“Between rising prices with record inflation and rising interest rates, consumers are rightfully concerned about how they will fare this year,” Herman says. “With so much economic uncertainty coming from so many situations outside people’s control, it’s vital to make sure you have a good handle on your finances.”

Getting organized to successfully navigate the coming year

Like many experts, Herman is concerned that the government’s efforts to sustain our economy may only be delaying financial crises for many American households.

“My concern is what happens when the government stops providing stimulus payments and ends programs like federal student loan forbearance and the foreclosure and eviction bans,” Herman explains. “I’m worried that we’ll see spikes in defaults, evictions, and foreclosures. People need to be using their stimulus, their tax refunds, and this time right now to get organized so they can avoid these kinds of devastating financial events.”

Consolidated Credit offers these tips for getting organized this spring to maintain financial stability throughout the rest of the year and beyond:

1. Take complete stock of where your finances stand now

Couple organizes their finances for Financial Literacy Month

The first step in getting your finances organized for spring is to take stock of where you stand. Revisit your budget—or if you don’t have a budget, take some time to make one.

You should also take time to review all your debts, bills, and obligations. You want to know exactly:

  1. How much you owe on each account
  2. What’s current and what’s past-due
  3. How far past due bills are and how much you will need to catch up

Consolidated Credit has a series of free worksheets that can help you get organized:

2. Take advantage of any government assistance while it’s available

It’s important to stay updated on when federal protections and relief programs will expire. This list can help you get started:

  • Income taxes are now due on April 18, 2022.
  • Federal student loan forbearance and the interest freeze on federal student loans were extended through May 1, 2022.
  • The Emergency Rental Assistance Program, which can help you and your family catch up and stay current on rent and utility payments, will continue. However, funds in many programs are running out, so time is limited to get assistance.
  • Homeowner assistance fund (HAF), a federal program that provides billions of dollars to states to help their residents catch up with their mortgage payments, has officially launched. Homeowners that faced housing insecurity as a result of the pandemic can apply now.
  • Free weekly credit reports during COVID extended until April 20, 2022.

Be aware that these protections may be extended, but don’t count on further extensions or additional government assistance. Be proactive so you can get the financial assistance you need while it’s available.

On December 22, 2021, the U.S. Department of Education extended the student loan payment pauses through May 1, 2022, for eligible loans. The pause includes:
• A suspension of loan payments
• A 0% interest rate
• Stopped collections on defaulted loans
Once the payment-pause ceases, you’ll receive your billing statement or other notice at least 21 days before your payment is due. It will include your payment amount and due date.

The federal government has also provided $46.55 billion in rental relief funds to state, county, and municipal agencies throughout the U.S. If you are behind on rent payments, contact a HUD-certified housing counselor in your local area or call 2-1-1 to find programs that may be available to help you catch up.

For homeowners, the Homeowner Assistance Fund (HAF) was put in place to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy services, and displacement of homeowners experiencing financial hardship after January 21, 2020. The HAF provides a minimum of $50 million for each state, prioritizing the funds for homeowners who have experienced the greatest hardships. This leverages local and national income indicators to maximize the impact.

Your 2021 federal income tax returns offer the opportunity to claim two key credits that can provide money to help you get through the pandemic.

The Recovery Rebate Credit allows you to claim the last stimulus check payment distributed in early 2021. If you did not receive the payment, then you can use the credit to get the funds you are owed.

You can also claim the expanded Child Tax Credit. Many parents received payment advances in the last six months of the year. If you did not receive advances, then you may be able to claim a big credit this year when you file. And even if you took the advances, they only paid half of the full credit you were owed, so more money is coming.

Finally, if you received these credits last year, you should have received letters in the mail from the IRS detailing those payments. You will need this letter when you file your taxes.

3. Build financial literacy so you’re better equipped to maintain stability

“This pandemic has certainly been a black swan event that no one could have predicted,” Herman says. “But financial downturns and household emergencies are inevitable. You need to plan and prepare your finances for the worst, so you can maintain stability in any situation that may arise. The more you know and the more you use that knowledge, the better prepared you will be when something like this happens.”

Consolidated Credit offers free financial education resources that can help you get started. We also have resources that can help you plan for major life events—both those that are expected and the unexpected.

We also have a free webinar on-demand that can help you set a financial spring cleaning plan:

Finally, whether you’re ahead or behind, take steps to eliminate any credit card debt that you may be carrying. According to our financial outlook survey, people with over $2,500 are less likely to have an emergency fund. Don’t let debt hold you back from building your financial safety net. Set a debt reduction plan or talk to a certified credit counselor to find solutions that can help you pay off credit card debt faster.

Talk to a certified credit counselor to customize a strategy for paying off credit card debt.