My ‘why’ was the goal of reducing financial stress. I grew up middle class with family members who owned their own businesses or ran side hustles like Christmastime tamale vending and year-round Avon cosmetic solicitations. I learned that money was important for survival, and that more money could be made in creative ways, but our bases would always be covered. In college—living with five housemates in Portland, Oregon, miles away from family in California—I worked 30 hours a week at two to three minimum-wage jobs and used food stamps to make ends meet.

A decade after moving to Portland, I’ve built up enough savings to absorb once-devastating emergencies, and I don’t have to count pennies at the grocery store. But I’m vulnerable to  burnout, afraid that if I don’t say ‘yes’ to every gig, I’ll fall back into the cycle of debt that comes from lacking any financial cushion.

My ‘why’ at the beginning of 2019 was also to establish a healthier, more sustainable work/life balance; to learn how to adapt to the wild ebbs and flows of the freelance lifestyle; and to prepare to take care of future retirement-age me.

Consider these guiding questions to help you find your why: How do you feel about money? What are some thoughts about money your family taught you? Do you agree or disagree with these statements? Why are you interested in developing your financial literacy? What do you hope to gain from this increased knowledge? What challenges might you face? What outcomes do you envision as a result of this new information? How might your life change? In the short term? In the long term?

THE HOW

There are many ways to embark on a financial literacy journey, but many begin with a pulse-check, time for reflection and analysis, and a specific course of action.

“We need to start with baby steps,” explains Itzel Hernández-Spehar, director of economic opportunity at Hacienda Community Development Corp. “When people come to Hacienda, we [create] an action plan. We need to give people, at most, three items to follow-up with. If we give people a lot of things to do, it becomes overwhelming and they won’t be able to follow. But it is possible if we take baby steps and have achievable goals in mind.”

Hernández-Spehar says having an accountability partner—someone to check in with during scheduled times—can greatly increase the likelihood of success. Planning that time ahead makes it less easy to overlook when our lives inevitably get busy.

For financial literacy newcomers, Hernández-Spehar recommends three items:  creating a budget, establishing a savings goal, and checking your credit score.

HOW TO BUDGET

Create a budget by reviewing pay stubs and/or profit and loss statements to determine your income. Once you know how much you bring in each month, you’ll know how much you can save and spend.

Write down all monthly expenses. For intermittent expenses (like a car repair), or costs that fluctuate month-to-month (like your electricity bill), use averages to determine the monthly cost. For example, if you know you’ll spend $300 on seasonal yard work twice per year, the monthly average is $50.

After you’ve calculated your monthly expenses, subtract this amount from your income. If the sum is positive (above $0), you have an overage. If the sum is negative (less than $0), you’re spending more than you’re making. If you find yourself in the latter scenario, you can either make more money or spend less in order to accommodate savings. If you’re not sure where to cut spending, try tracking every purchase for one month, then considering whether your spending reflects your values or if there are any surprises you’d like to correct.

Developing a savings mindset

Determining the amount to save is unique to every household, their financial circumstances, and their goals. Hernández-Spehar likes to reframe savings as compensation rather than restriction. “The most important thing is to establish a savings goal, even if it is $25 per month,” she says. “If [families] are in a situation where they barely have money to pay their expenses, we just tell people to continue doing what they are doing. Most of the families I see can save, but they just don’t pay themselves first.”

Savings habits help people achieve stability and resilience against emergencies as well as invest in more costly items and/or experiences down the line.

When it comes to money management, “Everything should fall in place at the right time,” adds Nita Shah, executive director at Micro Enterprise Services of Oregon (MESO). By rethinking everyday purchases and dollars saved as conscious financial decisions, individuals can make informed choices daily to help them achieve what they want in their lives.

CREDIT, MINDSET, AND MORE

Credit scores, like savings, can have a ripple effect on other areas of your life. This number communicates the likelihood that you’ll pay back what you borrow. Good credit takes time to build but can determine where you live, your rate of interest on auto loans and credit cards, and your approval for business loans. Knowing your standing is a great first step toward learning more about credit. “It can also be repaired,” adds Hernández-Spehar, so don’t get discouraged if it’s not as high yet as you’d like.

The federal government provides free credit reports that don’t lower your score at www.annualcreditreport.com, and companies like CreditKarma and certain banks offer credit score monitoring as free services.

Ultimately, financial literacy advocates for what may feel like a shift in perspective, beyond just numbers. These outlooks are referred to as money scripts or beliefs about money stemming from childhood and the culture around us. They can be neutral, hold us back, or propel us toward action.

At the end of the day, financial literacy is about getting to know yourself better and staying rooted in what you care about.

“We are fighting against giants,” says Hernández-Spehar. “We live in a culture of consumerism, and every day we are bombarded with advertisements from multi-million-dollar companies. We can easily get lost if we don’t have a goal. So, we need to go back to who we are and what we value.”