A report was released in 2018 that reported White Americans and Asians could correctly answer 3.2 out of six questions about basic financial literacy. Comparatively, Hispanic Americans could answer 2.6 questions correctly, while Black Americans answered 2.3. These scores were marked as below the national average.
Further ahead, a survey in 2022 pointed out the average net worth of a Black family was $44,900. A contrast with the median wealth of White families, standing at $285,000 in the same year according to the Federal Reserve’s Survey of Consumer Finances.
This is why Glowfidence aims to provide financial literacy training programs for the Black community. However, what does financial literacy entail and what are the futuristic benefits when equipped with its knowledge? This blog will answer these questions including what one should access daily to gain financial literacy.
What is financial literacy?
Financial literacy is the ability to understand and effectively leverage various financial skills. This includes personal financial management, budgeting, and investing. It encompasses knowledge of financial products and services, and the skills to make informed money decisions.
Financial literacy in the Black community is important for everyone regardless of income level. When you know how to manage your money, it becomes easier to make sound financial decisions to grow your wealth.
Why is financial literacy such an important aspect?
Understanding what your money means to you is a whole different ball game. It’s not just about what you earn and how much remains with you by the end of the month. It’s about how you manage it and make it grow for you, your family, and the future.
Let’s look at some of the benefits of gaining financial literacy for the Black community:
- Financial literacy can help break the cycle of facing systemic barriers to wealth accumulation.
- By understanding budgeting, debt management, and credit scores, Black Americans can achieve financial stability.
- Black Americans can make better decisions about housing, education, and retirement planning.
- Black Americans are also protected against predatory lending practices that disproportionately target our communities.
FAQs
1. What should I learn to gain financial literacy?
Gain access to various sources such as Investopedia, financial influencers, finance magazines, etc. You can also enroll in a financial literacy training program.2. What should be my initial steps toward financial independence?
- Start by creating and sticking to a budget to track your income and expenses.
- Develop saving habits.
- Learn about your investment options.
- Learn how a credit score is calculated.
- Learn about basic tax principles, deductions, and credits