April isn’t just about filing taxes—it’s also Financial Literacy Month, a perfect opportunity to reflect on your financial habits, expand your knowledge, and take meaningful steps toward improving your financial well-being. Whether building your first budget, preparing for retirement, or navigating the complexities of paying for college, financial literacy is the foundation for making confident, informed decisions.
It’s important to remember that financial literacy isn’t something you master once—it’s a lifelong journey of adapting, learning, and growing as your circumstances and goals evolve.
Here are some practical steps you can take today to strengthen your financial foundation:
Lessons from Tax Season—Turning Insights into Action
Tax season may not be anyone’s favorite time of year, but it does have a way of sharpening our focus on finances and decisions over the past year. It’s also an opportunity to reflect and identify changes that could improve your financial situation—and potentially your tax outcomes—for the year ahead.
- Reflect on Your Tax Return: As you gather your records to share with your tax professional, it's a good time to identify patterns in your income, expenses, and deductions. Determining how much is coming in vs. how much is going out is the first step in creating a realistic budget.
Spotting overspending or missed opportunities may help you modify your behavior and adopt better financial habits that could benefit your financial health in the long term. It's also worth reviewing your tax withholdings to see if they align with your current situation.
- Common Gaps in Record Keeping: If tax time is always a last-minute scramble for documents, receipts, and other paperwork, learn from this year’s experience and commit to being better prepared for next year.
A good tax document organization system can help you track income, deductions, and expenses year-round. Being organized can make it easier to calculate taxes accurately, claim deductions, and make smart financial choices.1
Having disorganized tax documents can result in issues like late filings, missed deductions, and lost records. Missing deadlines could mean extra fees. Overlooking deductions could result in missed opportunities. And lost records could have multiple negative ramifications.1
For physical paperwork, consider setting up folders or binders for different types of documents. Think of separate folders for personal bank statements, medical records, and investment statements. Arrange papers in chronological order or by categories inside these folders so you can easily find them. Label folders clearly and keep them in a filing cabinet or a fireproof box.1
In today’s world, you may want to go digital. Many financial institutions send tax documents electronically. Download them and save them to a digital folder. For physical documents, scan them and save them to the same folder. Arrange these digital files in folders and sub-folders on your computer or an external hard drive—just like you would with paper copies.1
Many financial professionals offer clients access to a secure digital vault. These tools help you store and organize your financial documents so they are accessible when needed. Whichever method you choose, regularly backing up your digital files can help avoid any potential data loss.
These record-keeping ideas are not a replacement for real-life advice. We would encourage you to speak with your tax, legal, and accounting professionals before modifying your record-keeping strategy.
- Using Your Tax Refunds: According to IRS data from February 2024, the average tax refund amount was $1,395 in 2024, down nearly 29% from $1,963 the previous year.2 Of course, this is just an average, and your refund might be higher, lower, or non-existent if you owe the government money.
If you receive a tax refund, here are a few ways you may want to put it to use:
- Build Your Emergency Fund
An emergency fund is one way to help manage unexpected expenses or layoffs. If you can't put away three to six months of expenses in your savings with your regular paychecks, your tax refund can be used to boost that number.
- Build Your Emergency Fund
- Pay Down High-Interest Debt
If you carry a balance on credit cards or other high-interest debt, consider paying down that balance and free up your budget.
- Pay Down High-Interest Debt
- Tackle Maintenance Costs You’ve Been Postponing
Have you postponed car issues, appliance problems, or home repairs because of the costs? Consider using extra cash from a refund to address these needs before they get worse and potentially more expensive to fix later.
- Tackle Maintenance Costs You’ve Been Postponing
- Better Yourself
You could use your tax refund to invest in yourself. Ideas could include taking a course at a local college, getting a certification that could improve your job prospects, or finally starting that side hustle you’ve been thinking about.
- Better Yourself
- Invest Extra Cash
If you receive a larger refund, you may want to work with your financial professional to invest that money.
- Invest Extra Cash
Spring Clean Your Financial House – Declutter & Organize
Financial wellness includes taking steps to declutter and organize your financial life. Many tools and resources make spring cleaning your financial house more manageable and efficient. Here are a few areas you can focus on:
- Digital Financial Organization:
Moving your financial life online has become the preferred method for many. It can be more convenient while helping to manage the clutter of physical mail and stacks of paper on your kitchen counter. Online bill pay, digital account statements, and electronic documents are commonplace.
While streamlined digital access has many benefits, one downside is the proliferation of passwords you need to remember. Technology can also help with this. Password managers are available online to help you keep track of your complex and varied passwords for each key account.
While doing your financial spring cleaning, it’s also a good time to review and update those auto-payments if necessary.
- Fraud Protection Checkup:
Spring is also a good time to review the security of your identity and personal data, especially when using online accounts.
Security can be a real problem. A 2024 Federal Trade Commission (FTC) study showed that consumers reported losing more than $10 billion to fraud in 2023, marking the first time that fraud losses have reached that benchmark. This statistic marks a 14% increase over reported losses in 2022.3
To help protect yourself, consider monitoring your financial accounts regularly for suspicious activity, especially during tax season.
You can attempt to enhance your online security to protect sensitive information by using strong, unique passwords, enabling multi-factor authentication, and regularly changing passwords.
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