Mind on My Money : Black Personal Finance 101
Many in the Black community find that getting a handle on their finances can feel somewhat like the inner workings of a secret society. Those who are on the in are able to manipulate and control their destiny. Those on the out feel helpless and powerless to change their situation.
In reality this need not be. In order to fully manage and improve your situation, all you truly need is education. Once you become familiar with how the system works, you can better approach your financial challenges with knowledge and a sense of empowerment.
In order to fully control your personal finances, it is imperative to understand the A-B-C's of money management. This requires knowledge of where you stand as a consumer (Point A), a clear idea of what you want to accomplish (Point B), and a specific action plan to get from Point A to Point B.
In today's current economic environment, financial illiteracy is a liability that the Black consumer can ill afford. The sad reality is that the number one root cause of debt problems and poor credit is bad financial management. While many consumers can pinpoint a single major setback that pushed them over the edge, the fact is that many of these consumers were on the brink of disaster long before the final straw. Many of these individuals were perched on the edge of financial peril so long they had begun to accept it as their reality.
Regardless of your financial standing, regardless of your earning bracket, the simple- yet often ignored truth- truth is that the development of responsible financial habits will often put you in a position to better weather any storm you may encounter.
In many cases, a serious illness, job layoff, divorce or other unexpected life altering event is all that it takes for a person who otherwise had great credit to be overwhelmed. But in a majority of these cases, simple financial preparation could have better positioned that individual for an unexpected setback.
Many in our communities are confronted with the very real possibility that their jobs may not be around a month, a week, or even a day from now. In the current uncertain economic environment many employees are concerned about the security of their jobs especially at a time when a majority of companies are tightening their belts.
Yet, approximately 20% of American adults keep little to no track of where their money is going each month. And many of those who do track their money still find themselves struggling from month to month.
It is simply a matter of habits. Bad financial habits lead to money issues, while the development of good money habits can liberate you from financial woes. While the process won't occur overnight, the next few pages will deal with effective strategies for gaining control of your finances.
next: Getting on Track