As someone who has always considered herself a frugal spender and now studies accounting, I find myself watching my spending habits more closely than ever — especially these days. But my financial literacy goes beyond just being money-conscious. Almost three years ago, I became involved with my first-ever financial literacy education event. As a young freshman at the University of Connecticut, I quickly found myself deeply engaged in the process of learning and teaching essential money management skills. Through my internship with UConn Extension, I had the opportunity to assist with workshops aimed at making financial literacy more accessible, and these experiences opened my eyes not only to the importance of budgeting and saving, but also to how empowering financial knowledge can be when shared with others.
Of course, financial literacy is not always easy. “Making personal financial decisions can be challenging,” my former internship boss, Faye Griffiths-Smith, family economics and resource management associate extension educator tells me. “Having a clear sense of your values, goals, priorities, and what motivates you to continue to move forward along with financial knowledge and skills can be important keys to your financial success.”
So, in honor of April being Financial Literacy Month, I want to share three simple yet powerful pieces of advice that I picked up during my internship — tips that have stuck with me and continue to influence the way I approach spending today.
1. Check purchases against my hourly wage
One of the most helpful pieces of advice I was given while earning a minimum wage salary was to consider potential purchases as they related to my wage. Basically, I think in terms of the hours I have to work in order to afford any given item. For example, if I make $15 an hour, is working two hours really worth a single lip gloss or a skirt?Â
This type of reflection can be very helpful when starting to understand financial literacy. So, whether it is as simple as thinking of how much you earn or implementing a more complex analysis, if a purchase matches your financial values or goals, this way of thinking can help you make better purchases.
2. Double the value of an item I want to buy
When assessing if an item is truly worth it, or if it makes financial sense to purchase it right now, consider if you can afford double the value of the item. I use this test to demonstrate how financially sound I am. If doubling the cost means I can no longer afford the item, then I may want to wait until I’ve saved more money. If an item is so expensive it can jeopardize your entire savings, it may be worth your time to assure you can feel secure purchasing it. Of course, this tip ignores other important factors, like necessity or timing, but if you are able to wait and hold off, it may be worthwhile.
3. Enact a 24-hour waiting period
Sometimes the reason you want to buy something is because you are filled with a rush of energy or care more about your current circumstance than the actual item. For example, I always feel more willing to buy things on vacation than on a regular school day. As a result, waiting up to 24 hours before purchasing an item can help you determine if you truly want or need it.Â
Within 24 hours, people can forget about the product and never end up buying it. This can stop you from buying everything at the mall or Target, especially if you would have to physically return to the location to get the exact product. This can be tricky if you are an online shopper, because the access is still as readily available compared to physical stores. However, knowing you gave time and thought to a purchase may be enough to deter you — or to ensure you’re making the right call by buying it!