By: Rachel Wallace
As we stand at the edge of a new year, it’s the perfect time to reflect on where we are and where we want to be—especially when it comes to our finances. For many, the idea of financial literacy might feel overwhelming or even out of reach. But just like learning to read, understanding money is a skill anyone can develop with guidance and commitment. This holiday season, the greatest gift you can give yourself and your family is the gift of financial knowledge.
Why Financial Literacy Matters
Financial literacy isn’t just about managing money; it’s about empowerment. Without it, you’re at a disadvantage, navigating life’s financial decisions without the tools or understanding to make the best choices. It’s the difference between falling victim to high-interest debt and leveraging credit to build wealth. It’s the ability to plan for the future, protect your family, and create opportunities instead of waiting for them to appear.
Yet, statistics show that financial illiteracy disproportionately affects African American communities, leading to challenges such as higher debt burdens and lower savings rates. These aren’t just numbers—they’re barriers to our prosperity. But barriers can be overcome with knowledge, support, and action.
Make 2025 Different
As you prepare to enter 2025, commit to doing things differently. Start by taking small but impactful steps toward financial empowerment. Here are a few to get you started:
Create a Budget That Works for You
A budget is the foundation of financial success. A budget is your plan to tell your money where to go so you’re never left wondering where it disappeared. Write down your income and expenses and make a plan for where your money will go each month. This simple act can help you take control of your finances and identify areas where you can cut back or save more.
Understand Your Credit
Your credit score affects everything from getting a car loan to qualifying for a mortgage. Your credit report is a critical part of your financial health, and understanding it is a powerful step toward financial literacy. By law, under the Fair Credit Reporting Act (FCRA), you are entitled to a free credit report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—once every 12 months. To get access to your free credit report:
Step 1: Visit www.AnnualCreditReport.com, the only authorized website for free credit reports. Select the option to request reports from one, two, or all three credit bureaus. You will be asked to verify your identity by answering a series of security questions. These questions may include details about past addresses, loans, or credit card accounts. Don’t worry—this is a secure process and not a scam. The questions are designed to protect your identity and will never ask for sensitive information like passwords or banking account info.
Step 2: Check your report and personal information for accuracy and review your credit accounts. Your credit report is like a school report card, but for money. It shows how well you’ve been doing with paying back the money you borrow. Sometimes, there can be mistakes on it. If you see something inaccurate, you can report it, and they will have to investigate.
Set SMART Goals
Instead of vague resolutions like “save more money,” set SMART goals. Specific, Measurable, Achievable, Relevant, and Time-bound goals. For example, “Save $500 for an emergency fund by June 2025” is clear and actionable.
Invest in Knowledge
Financial literacy doesn’t happen overnight, but you don’t have to figure it out alone. Take advantage of resources like financial coaching, credit repair workshops, and online tools.
Closing Thought
Financial knowledge is power. By taking the time to understand your finances, you’re not just improving your situation—you’re setting the stage for a brighter future for yourself, your family, and your community. Financial literacy is a journey, not a destination. The first step is the hardest, but it’s also the most rewarding. Give yourself permission to learn what you don’t know and seek support from those who can guide you.
Rachel Wallace is a financial literacy advocate and the consultant of EMPOW8R Enterprise Group, a platform dedicated to empowering individuals and small business owners with the tools and knowledge to build wealth and achieve financial freedom. For more actionable tips, resources, financial coaching, and classes on financial literacy, visit www.empow8r.com or contact her at info@empow8r.com.
