• Ashley Wenger

How to Improve your Financial Literacy

Updated: Aug 10

April is Financial Literacy Month! So, what is financial literacy and why is it important?


According to the Corporate Financial Institute, “Financial literacy is the cognitive understanding of financial components and skills such as budgeting, investing, borrowing, taxation, and personal financial management.” Having a good foundation of financial literacy helps you make smarter money decisions and plan for the future. For entrepreneurs, being financially literate starts with managing your personal finances, and then beginning to build your business finances. Many people do not receive any financial literacy education, and even for those that do it can still be hard to understand, which makes navigating personal and business finances confusing and overwhelming. Over the course of April, we have collected tips and resources that can help you build the basics of financial literacy.


Financial Advice Tips for Entrepreneurs

1. Keep your business and personal finances separate.

  • Open a business checking account. Some banks now offer free business checking. It’s important to have a business checking account and always keep your personal and business money separate.

2. Determine your creditworthiness.

  • Determine your creditworthiness and address your credit problems. Get your free credit report (www.annualcreditreport.com) and take steps now to position yourself for financing.

3. Research your financing options.

  • Determine your likelihood of qualifying for financing and get pre-qualified and/or secure start-up financing.

4. Allocate money towards an emergency fund.

  • Put money into a business savings account monthly. These funds will allow you to operate for several months without revenue, should an emergency situation strike your business.

5. Create a budget.

  • Keeping track of numbers in your head will get complicated. Develop a monthly budget to track revenue and expenses to be able to visualize where you’re earning money and where you’re losing it.



Resources

Educating yourself on financial literacy shouldn’t be intimidating, overly time-consuming or expensive. We’ve collected a list of financial resources that are free or inexpensive, and easy to integrate into your daily life.


Books

  • Get a financial life: personal finance in your twenties and thirties, by Beth Kobliner.

  • Accounting made simple, by Mike Piper.

  • Keys to the vault, by Keith Cunningham.

Podcasts

  • How to Money: Episode 494, Spring Cleaning your Finances like an Adult

  • This podcast will introduce you to various financial literacy resources and knowledgeable individuals in the industry.

  • Planet Money: How Bad is Inflation?

  • This NPR-style podcast is engaging and breaks down a wide range of interesting financial and money topics to start building your financial vocabulary.

  • Positive Vibes from the Valley: Episode 6, Financial Wellness with Karen Poff

  • This Shenandoah Valley-based podcast covers different aspects of “wellness” to improve and balance your life, specifically how to create financial wellness.


Programs

Now it’s time to put what you’ve learned into practice. In addition to financial consulting, there are several other programs that can help you learn about organizing your finances, put what you’ve learned into action, and even help you learn how to obtain loans for your business!


Budget Referee is a budget management app to help people easily manage their finances with less effort and more strategic results.

SBA Backed Loans The Small Business Administration makes direct loans to businesses and homeowners recovering from a declared disaster.

SBA Learning Platform is an online resource to educate entrepreneurs on best practices and financing options.

SCCF Business Bootcamp is an 8-week course that will help you build the basics to get your business started. BBC Partner programs across the Shenandoah Valley include…

  • Shenandoah University’s Entrepreneurship Certification

  • The Walker Program

  • RevUp ShenCo

  • GROWaynesboro

SCCF Small business loans range from $1,000 to $50,000. Loan funds can be used to fund a variety of projects including equipment, inventory, and working capital expenses.

TrimTab gives people the reason, tools, and motivation to get out of debt. The budgeting app offers step-by-step and easy-to-follow guidelines that help users manage and decrease their debt over time.

Vitta Solutions humanizes finance with 1-1 coaching, strategic planning, and workshops. The company specializes in giving entrepreneurs insight into the financial health of their business so they can make impactful business decisions.


Putting together the building blocks of financial education is the start of managing your business and will help you have long-term success.

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