Ways to help minorities attain financial literacy with credit and budgeting

Finance is an essential aspect in today's world and living without having financial literacy isn’t living, but surviving. Having financial literacy provides one with a way to uplift oneself out of poverty and attain freedom from financial insecurities and worries.

So let’s find out what do we mean by financial literacy or financial knowledge?

Financial literacy is the ability to know how to earn, save, spend, invest, and manage one’s earnings. It’s a conscious decision to obtain as well as implement the knowledge and skill gained, as one need to have the attitude to want to achieve financial freedom.

Why do we need financial literacy and inclusion?

Lack of financial literacy leads to an imbalance in the socio-economic structure in a country while tying the poor in a vicious cycle of daily earning and spending with no reliability of payments. This acts as a barrier from allowing them to grow financially as they are unable to access credit in any form to enhance their business or develop their goals. Financial literacy and inclusion will help improve and slowly eradicate this socio-economic imbalance.

Now that we know what financial literacy is let's understand how to gain financial literacy.

• A behavioral change is needed among the minorities to bring about an economic balance in the social structure; hence, understanding the difference between necessary and unnecessary expense is the primary aspect of financial literacy. Before indulging in spending something, one needs to understand if it's essential or can do without.

• Budgeting is another important aspect. In regards to one’s daily expenses, one needs to create a budgeting structure based on the necessary daily or monthly expenses and follow this structure to the T. This will help one avoid overspending or spending on unnecessary items, which will alternatively create a pool for more savings.

• Savings needs to be regular and constant. Inconsistency should be avoided because if one has the right amount of savings, then one will always have a fallback option. Savings work as a safety net in case of any unforeseen situation or an unavoidable expense. A daily earner needs to save daily from the days earning to maintain regularity and stability.

• Making wise investment decisions to gain good returns improves their economic standard and creates a pathway to building a profitable business; this is another critical aspect of financial literacy. Also with the availability of attaining credit, one can enhance one's business enterprise to greater heights by investing further and improving lives and societies.

The wise and sensible implementation of financial literacy learning helps credit repair and builds stability among the minorities by providing them the tools to grow. The trick is to understand how finance works and the capability of being able to make an informed, knowledgeable decision based on this understanding. This will provide one to achieve a certain level of financial freedom to live life on one’s own terms freeing them from the chains of insecurity, uncertainty, and poverty.