Throughout centuries of history - over and over again - the Black community has been stripped of wealth through policies, massacres, theft and destruction.
According to the 2016 Survey of Consumer Finances, the median white household has a net worth of $117,000 - 10 times the median Black household net worth of $17,100.
It would take 228 years for Black families to amass as much wealth as white families if our current policies stay in place.
When it comes to our financial lives, we often focus on ourselves, but our environment and those around us play a big part in our actions - and often not for the better.
Environmental toxins are the people, places, and things that get the best of your spending. Maybe it’s a friend that you shop with that always encourages you to “treat yourself” or the store you tend to impulse shop online. It's not personal - it just means your spending gets off track when you’re together.
With a very unpredictable 2020 finally behind us, it might seem futile to attempt to draft a 2021 financial plan. How can we possibly predict what’s going to happen? Isn’t this a waste of time?
While plans can and will change, starting the year with a vision for what we want to happen in our financial lives can make all the difference. It’s also always worthwhile to gain awareness of and clarity on how we’re spending and allocating our money.
If we’re being honest, most of us have no idea where our money is going.
Many of us don’t want to look because we’re afraid of what we might find. When I first started keeping a money journal, I found out that I spent $200 per month on frozen yogurt. I was shocked. That was $200 per month and $2,400 per year that I’d much rather be allocating somewhere else.
Most of us know the feeling - we make a purchase we regret and it sends our spending in a tailspin for a week, month, or even years. Next thing we know, we don’t want to look at our credit card statements, our account balances are decreasing, and our stress is on the rise. How do we stop the bleeding?
One of the most effective ways to get our spending back on track is with a regroup. We need to give ourselves a chance to get our money mindset back where we want it.
One of the things I discovered very early on in my money journey is that being good with our money isn’t just about the numbers. Yes, I didn’t know what I was supposed to do with my money but even once I did learn and decide what would work best for me, I wasn’t taking action that aligned with that plan. And it’s not like it was too complicated or confusing.
I wanted to spend less money than I was earning (and at the time I had a steady paycheck) and have some money leftover to save. That’s it.
Why didn’t it work? How we interact and behave with money (aka our relationship with money) has a lot to do with our emotions and beliefs.
How we traditionally try to save money doesn’t work. We get our paycheck, then we pay our bills, live our lives, and even get people gifts. We wait and hope that there will be money leftover to save for ourselves. There’s not.
Then we think, if we earned more money, we’d finally start saving. We get the raise, earn our higher paycheck, then we pay our bills and life our lives. We hope there will be money leftover to save. There’s still not.
Money is tough for so many reasons: we aren’t taught about it, it’s taboo to talk about, and we derive a lot of our self-worth from our financial status. And that’s just if you’re a white man.
Women and even more so, BIPOC, have infinitely more working against them when it comes to their money. There are pay gaps, investing gaps, accessibility gaps, discrimination - and the list goes on and on.
The tool I use over and over again in my own financial life and with my clients is a budgeting template. Most of us believe budgeting will be limiting and restrictive, but I’ve actually found the opposite to be true both for myself and for the thousands of people I’ve helped with their money.
When we know what we want to be happening with our money (having a spending plan) and then track where our money is going (following through with that plan), it’s actually hugely liberating.
You meet “the one,” decide to spend your lives together, and get married. Months later you find out that your partner has a low credit score, is deep in debt, spends outside of their means, or all of the above. Now you are arguing about money on the daily and are worried about how you’ll ever get a mortgage. How had this not come up before you got married? Why don’t you talk about money with your partner?
