March 15, 2021
The origins of April Fool’s day are not exactly known. Some historians link it back to 1582 when countries switched from the Julian Calendar to the Gregorian Calendar. One big difference is that the Gregorian Calendar placed New Years' on January 1, while the Julian Calendar began the new year with the spring equinox around April 1. Those who continued to celebrate the new year in April were often called fools and had pranks played on them due to their slow understanding of the new order.
What is known as April Fool’s day spread throughout Britain in the 18th century. At this time, it was a two-day event. Starting with “hunting the gowk” in which people were sent on phony errands and followed by Tailie Day, which involved pranks played on people’s behinds, such as pinning fake tails and “kick me” signs.
Flash forward to today and most of us are familiar with the holiday. Some of us are pranksters while others are prank victims. Generally, the pranks are harmless and not long-lasting. But what about financial foils? What financial mistakes could you be making this spring that are turning you into an April fool?
Splurging with your tax refund OR stimulus check
If you are receiving a tax refund or stimulus check this season, put some serious consideration into what you could do with the money. Your mind may initially jump to a shopping spree or beach vacation but be sure to look at your complete financial picture. Does your savings account have enough to cover an unexpected car repair or a few months’ expenses if you couldn’t work? Maybe credit card interest is adding up and creating a larger financial burden than anticipated. Whatever it is, before you get to spending it is important to have a clear understanding of your financial situation. For more tips and details about how to put your tax refund/stimulus to work long-term, check out this article here: 6 Smart Money Moves to Make With Your Tax Return
Not saving OR investing
The sooner you start saving or investing the better, but better late than never. Make sure you are taking advantage of your 401(k) match program if your employer offers one. If you are not contributing to the level your employer matches, then you are literally leaving free money on the table. But don’t stop there. Keep contributing more to maximize your returns. Those under 50 can contribute up to $19,500 per year and those over 50 can contribute an extra $6,500.
If you are not able to invest you should at least be saving. According to a recent Federal Reserve survey, almost 40% of Americans are not financially prepared for a $1,000 emergency expense such as car repairs or medical bills. When expenses such as these pop-up – as they inevitably do- many are forced to take on high interest credit card debt or payday loans. For some, this cycle creates a hole so deep that it can be difficult to get back to a healthy or stable financial footing. Don’t let this be the case for you. Even saving only $25/week will yield $1,300 at year's end, not calculating the compounding interest many saving accounts offer.
Not knowing where your money is going
It’s pretty easy to track mortgage/rent, utilities, and other bills. But what about all the little day-to-day expenses that add up? I’m talking trips to a convenience store, going out lunch, and Thursday night happy hour. The point is, if you don’t know down to the percent where your money goes, it is very difficult to regulate expenses and stick to a budget. You must be aware of your financial weak points so you can start making better decisions. Budget apps, such as Mint, can be paired to your SunMark checking account to analyze what “bucket” your expenses go into. After a couple of months you should see a consistent spending habit form. Once you have all the information you can decide if you are happy with how you spend your money or, like most people, determine where there’s room for improvement.