This past summer, Jay-Z released his 13th album, “4:44” and gave us all a clear view on ways we can build wealth in a system that isn’t particularly for us. His lyrics brought awareness to an issue that has affected the black community for decades: financial stability. According to the Economic Policy Institute, the average wealth for white families is seven times higher than the average wealth for black families. These same statistics mention that more than one in four black households have zero or negative net worth.
In 2018, it’s up to us to live our best lives and change the ways of monetary culture. Cheers to a year of investing, saving and building wealth.
1) Set a Realistic Saving Goal:
Start small with your savings goal, with the intention of working your way up. Set a realistic goal that makes sense with your monthly income. You don’t want to become discouraged because your goal of saving $100 wasn’t successful when it’s impossible to save that much. Focus on your ideal number and divide it into small weekly increments. Even just $5 per week brings you to over $250 in just one year.
2) Seek Advice and Educate Yourself
Before obtaining financial wealth, you must first gain financial literacy. Building wealth is not linear and it takes TIME. Gaining advice from business books, credible articles and financial mentors will put you in an active mindset to accomplish your goals. You must invest in yourself by learning all that it takes to achieve success. Financial wellness takes education, curiosity and willingness to learn new and unexpected things.
3) Start by Investing Your Spare Change
Investing can be intimidating and confusing, especially as a college student or recent graduate, but it’s very important to start investing as early as possible. Getting started can be quite the challenge, but a few apps are making the process a little easier. The app, Acorn, works to debunk the stereotype of only investing large amounts of money. Acorn makes it easy and simple to invest the spare change that is left over with card purchases. There are a ton of other apps tailored toward investing and it’s easy to find the right app or website that works for you.
4) Keep track of Credit
Credit card history is one of the most crucial steps towards securing any bag. Good credit allows us to unlock numerous opportunities because it acts as a track record and builds trust. Having good credit is always the goal, especially if you plan to buy an apartment or car in the future. It’s important to use credit cards very wisely. Yes, building credit is important, but it’s also important not to swipe irresponsibly too. A lot of smart college students use credit cards to only make purchases such a gas or groceries. It’s also important to only spend what you can pay off the following month.
5) Build and Give Back
Building credit definitely takes time and will most likely will take at least 5+ years. But it’s really important to develop these practices and tactics. Consider starting a 401k at your job or a separate savings account for big purchases and emergencies. It’s important to start these practices now and also educate your family and peers. As a community, we all have to come together, give back and support one another if we want to obtain wealth as a black community.
Unfortunately, financial literacy is often overlooked in the black community. As millennials, future parents, leaders and teachers, it’s up to us to break the cycle. By educating ourselves and taking the proper steps for financial gains individually, we’re creating the blueprint for collective wealth.