If you want to advocate against poverty, especially the kind that predominantly affects the vast majority of people who live paycheck to paycheck, ensuring equitable treatment is essential. However, it’s also vital that we make the tools and knowledge that are part of financial literacy a lot more widely available as well. Here, we’re going to look at the ways that learning financial literacy, especially from a younger age, helps the fight against poverty.
You become more cognizant of your spending
A lot of people living from paycheck to paycheck track their spending and continuously adjust to try and find the savings that they need. However, by budgeting in advance with the help of tools like mint.com/how-mint-works/budgets, they can plan ahead to make sure that they’re ensuring they’re following the 50/30/20 rule. This means that 20% of their income is set aside towards financial goals, 50% of it goes towards essential household expenses, and 30% is left for discretionary purposes.
You learn how to start making your money work for you
Setting 20% of your money aside can have some very practical benefits if you’re able to put it in the right places. Most will want to ensure that a good portion goes towards things like their retirement and their children’s education. However, you should also consider learning more about which investments you can start putting money towards. Investing is the most effective way to see your money starting to make money for you, able to increase the overall value of your wealth much more quickly than saving in most respects.
You’re better able to escape debt
Debt can be a spiral that, once you fall into it, it becomes increasingly difficult to escape. A lot of people fall into debt by no fault of their own, often due to essential emergency costs that they have to cover, or due to unforeseen events like accidents and injuries. However, knowing the different options, from things like dtss.us/programs.html to debt consolidation, can help individuals better climb up that spiral. Unfortunately, most people simply aren’t aware that they have as many options as they do.
You can avoid getting undone by your credit
One of the biggest problems with our education system and its lack of grappling with financial literacy is that so many people graduate from or leave school without understanding credit. Without an understanding of how credit works, it’s a lot easier to slip into debt. As such, it’s vital to learn the importance of maintaining a good credit score, checking your credit report, and knowing how to build a credit history. Not only will it affect the rates for car loans, mortgages, and credit cards, but it can also impact your ability to get hired and even accepted for renting some properties.
Of course, the answer to fighting poverty isn’t as simple as learning to become financially literate. The poor in the country are taken advantage of. However, it can be a tool to help improve upon the habits that we typically get trapped in on the way to addressing those inequalities.