A Washington Post headline reads, “The wealth gap between whites and Blacks today in America is greater than [it] was in Apartheid South Africa”.
It is no secret that cultural attributes of women of color, especially Black women (let alone Black people) are highly desired by mainstream media and pop culture. This is very evident in the common adoption of music, slang, food, and even in the rise of cosmetic procedures to enhance body features to resemble images that were once predominantly akin to what it means to be Black. One thing, however, that no one is in a rush to copy is the wealth-building and financial habits of communities of color.
Even the most basic financial fundamentals are absent in most high school, college, and even graduate program curriculum in communities of color. An accident: I think not. The role of systemic racism and inequality is undeniable. But today, we’re going to do some self-reflection. While various non-Black communities are known to teach financial empowerment at a young age, communities of color and the Black community often seek financial guidance outside of their communities or are focused on more short-term immediately gratifying things to do with their money. This is not to say that financial education does not exist at all in communities of color but it is few and far between. In fact, most commonly, financial education is simply a product of what our parents or grandparents told us was best (even if that information is outdated and ineffective in the long run).
The building of Black wealth is almost laughable while the idea of generation wealth transfers (i.e. inheritance) can be summed up by the popularized social media response “#dead” (as in non-existent). We cannot only think about our own lives but also the example we’re showing as well as the legacy we’re teaching current and leave for future generations. We as a people must get a grip on this and it can start one household at a time. Not by getting the information and only keeping it for your family. But, instead, by imposing the each one, teach one mantra and spreading it to all.
As women, it begins with our households first. No matter how much money comes into your household, wealth is built in disciplines. If the person making $50K in income has better saving habits and makes fewer excuses they can outdo the person bringing in $100K in income. Below you’ll find 4 fundamental strategies to get yourself on a path towards incorporating financial habits that your bank account and your future family will thank for generations.
1 | ONE
DEVELOP A BUDGET (KNOW WHERE YOUR MONEY GOES):
If there was an amount that you KNOW you waste every month (buying things that you could’ve very well lived without), how much is that? Your money goes towards what you prioritize. Whether you agree with it or not, it’s true. Go through your bank statements for the last 3 months and see what you’ve been spending your money on. Identify if it’s a want or a necessity and decide if you will continue to prioritize in your bank account.
2 | TWO
PAY YOURSELF FIRST:
Neither that credit card nor that charge account is more important than your well-being and long-term financial security. So why pay them first and give yourself the scraps of what’s leftover? That type of behavior will continuously lead to a constant need for emergency loans, borrowing, living paycheck to paycheck, and no money for retirement when that time comes. Let me be clear. I am NOT saying do not pay your bills. Rather, just be sure to make yourself a line item in your budget. For example, why not utilize $50 of the $200 that you waste every month to grow your Emergency Fund to 3 – 6 months your living expenses. Payday & cash title loan businesses prey on people that do not pay themselves first. Or even to begin funding a Retirement Account that will allow you to retire when and how you want. Your retirement account is NOT a loan bank. Leave it alone. Or better yet, save so that you can provide a cushion of college savings for your child to minimize the likelihood that they will have to leave school major debt (or debt at all). Don’t shortchange yourself. In every way, your family will thank you!
3 | THREE
DON’T LEAVE YOUR LOVED ONE’S HOLDING THE BAG (FINANCIALLY):
This is especially the case when you have children, have accumulated assets (or plan to do so in the near future), or you have someone in your life that is dependent on you/your income. Are you as tired as I am to see GoFundMe posts, carwashes when you’re driving, and fish fry’s, tattoo parties, etc. when one of our loved ones passes away? Death is probably one of the most culturally avoided topics for Black communities. But unbeknownst to many of us it is not only one of the most helpful ways to relieve our family of financial strain in the case of our unexpected passing, it is one the most commonly used forms of generational wealth transfer amongst non-Black communities. A term policy (not cash value) is usually most appropriate for any middle-income family.
PLEASE NOTE: The policy you have should not only be the one your parent has on you. This is even truer when you have your own family. You should not rely solely on any policy that you’ve gotten through your job. Real estate (and other investments) is not the same as having life insurance.
USA Today writes, “Life insurance ranks at the top of the list of things consumers know they probably should buy, but get no personal enjoyment from whatsoever. There's just no happy way to look at life insurance. In the best-case scenario, life insurance is just another bill to pay. And in the worst case, your family collects the benefits, but unfortunately, you're dead. But while life insurance isn't all that much fun to buy, much less talk about, it's a critical part of many people's financial plans.”
An article written by the organization LIFE reads “Life insurance can do some pretty amazing things for people. It can buy loved ones time to grieve. It can pay off debts and loans, providing surviving family members with the chance to move on with a clean slate. It can keep families in their homes and pre-fund a child’s college education. It can keep a family business in the family. It can provide a stream of income for a family to live on for a period of time. First things first, though: you need to own life insurance.”
4 | FOUR
GET OUT OF DEBT:
Debt is the new form of slavery so we cannot fall for it. I believe there are valid ways to leverage credit but the reality is that very few of us are using it in that way. So get out of denial and come up with a plan. Bring out all of your interest-bearing debt statements as well as any old charged off/closed out debt that might still be lingering. The grudge that you feel against your creditor means nothing if it’s was is going to hinder you from buying a home or car. Again, face the music. Come up with a plan. It might be scary in the beginning but it will provide such a relief and gives you more control over your financial life.
While the list can be much longer, incorporating even these simple fundamental financial habits can make a world of difference for our communities.
Uplift #HERstory Contributor
@Njidekaobijiaku
Njideka Obijiaku, MPH | Financial Adivsor
Njideka is a financial advisor with a strong community and political organizing background. She is passionate about community empowerment and wealth-building to increase the number of self-sustaining families and communities of color.
Njideka believes there are avenues within the current system that families and communities of color can utilize to build up financial resources needed for the development of infrastructures that have major impacts on communities of color in public health systems and improve community self-awareness, belief in financial independence, and ultimate health and well-being.