Financial empowerment strategies concern the root causes of poverty and financial outcomes for individuals and families living with low income.
Because of this, they have been shown to affect long-term financial change, including improved credit ratings, increased savings and income, and reduced debt levels.
When financial matters such as these are addressed, access to routes out of poverty—including education, training, employment and asset/homeownership—is increased.
Interventions included in a financial empowerment model include basic needs assistance and consumer protection education; identification of and access to safe and affordable financial products; financial coaching and education; assistance with taxation and access to government benefits; and opportunities for saving and building up assets for financial security (United Way of Calgary and Area).
Here are some financial strategies you can consider:
Find your financial balance
Managing your finances means finding the right balance. Inflation and higher interest rates signal that you may need to adjust your budget to find the right balance between daily spending and paying down debt. The right balance will depend on your financial situation and goals.
This Financial Literacy Month, learn about good versus bad debt and how to manage your money in a changing world.
How to manage your money when interest rates rise
A rise in interest rates can cost you more to borrow money. Plan to pay down your debt as much as possible, starting with the highest interest rate first so you pay less money towards interest.
Make a plan to pay off your debt
Decide on a strategy for paying off your debt based on the types of debt and the amount of debt you owe. Taking steps to manage your debt can help you take control of your finances and increase your financial resilience.
Responsible borrowing can help you build a good credit history. However, using credit to spend beyond your means could put you at risk of no longer being able to manage your debt.
The interest rate for your loan is included in your loan agreement. Find out what your financial institution must tell you about interest rates when you borrow.