Benefits of Increased Financial Literacy for Minority Groups
In recent years, many have felt the consequences of a fluctuating economy. Minority groups often feel these waves and downturns stronger, as existing inequalities and barriers to economic success are amplified in a stressed economy. Promoting financial literacy can empower minority groups to thrive and overcome these obstacles.
Benefits of Increased Financial Literacy
1. Better-informed financial decisions: Burdening financial decisions rest more on the consumers. A lack of proper understanding or action on critical decisions for retirement planning, pension funds, and 401K savings plans can be financially detrimental. Financial illiteracy in decision making can exacerbate some of the issues minorities are experiencing, such as lower savings, increased debt, higher foreclosure rates, and decreased home ownership.
2. A better understanding of financial complexities: Interest rates, maturities, yields, options, and other terminology can be confusing and frustrating, especially since these concepts can have a dramatic effect on families’ financial well-being. Understanding how these concepts interact can help these families better prepare for home buying, financing, and saving.
3. Understanding resources and options: Many people rely on Social Security for their retirement income, but the future of this program is far from guaranteed. This underscores the importance of finding alternate ways to make retirement a reality, including the guidance of financial planners, early engagement with employer-sponsored retirement plans, and investment products offered by banks and credit unions.