5 signs you're not as financially literate as you think

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How to Be More Financially Literate



April is Financial Literacy Month, an event designed to get people thinking about how they're managing their money. If you're diligent about your finances, you're saving for retirement and you're paying all of your bills on time, you may think there's no room for improvement. But you might be surprised. If you've made any of the following money mistakes, it may be time for a financial refresher.

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1. You Think You Have One Credit Score

Your credit score influences your ability to get approved for loans and determines what interest rates you'll pay. The higher it is, the better. One thing people often get wrong about credit scores is assuming they have only one, a FICO score. In fact, there are upwards of 50 FICO variations, as well as VantageScores and proprietary scoring models used by the three credit reporting bureaus.

2. You Have No Idea What's on Your Credit Report

Your credit scores are based on the information in your credit report. Equifax, Experian and TransUnion all issue credit reports and each credit reporting agency can report different information. The Federal Trade Commission estimates that one in five consumers has an error on at least one of their reports that could be dragging their credit score down. If you're doing some financial spring cleaning, you might need to add checking your report and score to your to-do list.

Get your free credit score now.

3. You're Not Making the Most of Credit Card Rewards

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Using a rewards credit card for travel, gas or everyday shopping is a great way to earn points, miles or cash back, all of which can add up to big savings. The problem is that many people let those valuable rewards go to waste or undervalue them.

For example, let's say you have a travel rewards card that pays miles on purchases. Miles are redeemed for travel credit, with 10,000 miles equal to $150. If you were to trade those miles in for a gift card instead, the same 10,000 miles might be equal to $50. So you'd essentially be cutting the value of the miles by one-third and shortchanging yourself in the process.

4. You're Contributing the Bare Minimum to Your 401(k)

A 401(k) is a valuable tool for building long-term wealth. But if you're just chipping in the minimum required by the plan, you're not making the most of it. Why? You could be missing out on that oh-so-important company match.

According to a study from Financial Engines, one in four workers don't contribute enough to their 401(k)s to qualify for the match. As a result, they miss out on a collective $24 billion in savings each year, which breaks down to a loss of nearly $43,000 per plan participant over a 20-year period. If you're not saving enough to get the match, it might be time to rethink your contribution strategy.

Check out our 401(k) calculator.

5. You're Spending Too Much on Bank Fees

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A bank account is a must-have for things like paying bills and saving, but there's no reason to hand over more money in fees than you need to. When you opt into overdraft protection, for example, you may think you're saving money. But that's not necessarily the case.

According to the Consumer Financial Protection Bureau, consumers who opt in to overdraft protection pay an average of $29.09 a month in bank fees compared to $7.26 a month for people who opt out. If you have no idea what you're shelling out in fees each month, that could be a good reason to take a closer look at your accounts. Switching to an online bank or credit union may be a hassle, but it could save you money over time.

Final Word

While Financial Literacy Month puts the spotlight on financial knowledge and best practices in April, it's important to establish good money habits that you can practice throughout the year. If you're making any of these missteps, addressing them ASAP is the smartest move for your bottom line.

Photo credit: ©iStock.com/Gawrav Sinha, ©iStock.com/bernie_moto, ©iStock.com/shapecharge

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5 signs you're not as financially literate as you think

5. 5 unnecessary tech purchases that cost you money

When you're building a budget, the first thing to look at is non-essentials you can cut. Music, movies, books, apps and other bits of entertainment often fall into that category. However, you might not want to give them up.

The good news is that you don't have to. You can get all of these things for free if you know where to look. Learn how to get these for free, and more tech purchases you might be making that you don't have to.

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4. 3 things you're almost guaranteed better deals online 

When online shopping first started, it was a bonanza for saving money. Online stores didn't have to deal with sales tax, a large chunk of typical retail overhead and you could usually find a free shipping offer somewhere.

In recent years, however, brick-and-mortar retailers have evened the odds with price matching and other savings. So you still want to check both for deals before you buy something. However, there are three things you might buy that are almost always going to be less expensive online. Find out what they are and some good sites to find great deals.

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3. 3 secrets to dramatically lower your cable bill

When you're trying to cut non-essentials, your cable bill probably doesn't spring immediately to mind. Even though it's a huge expense every month, many people can't imagine going without their favorite shows.

Just because you're keeping cable, though, doesn't mean you should keep paying full price. Learn three secrets you can use to save big money on your cable bill, plus some cheaper cable alternatives you should consider.

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2. Test whether your ISP is slowing down your connection

Your Internet connection lets you check Facebook, send email, browse the Internet, watch online video, play online games and connects you to the single largest source of information in history. You need it to be fast, and you probably pay a hefty amount to get an Internet plan with decent speed.

But are you actually getting the speed you paid for? If you aren't, then you're just wasting money every month. Find out how fast your connection really is so you know your money is well spent.

(Getty)

1. 3 secrets to getting the lowest airfare online

One of the biggest travel expenses is the airfare. Even worse, every dollar you're spending on getting to and from your destination is money you can't spend enjoying yourself while you're there. So, finding a cheap flight is definitely something to shoot for.

Fortunately, getting a great deal is easier than you think. You just need to know what sites to use, when to buy and the value of flexibility. Get the full details so you can save big on your next trip.

(Shutterstock)

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