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- HIV Testing is HIV Prevention
- Your ‘Mental’ Endurance
- Bisexual Health Priorities
- Entertainment CEO DonJuan Clark
- New Drug Helps Men with Melanoma
Real Steps, Real Savings in Black and White
Saving money is easier said than done. If you were raised in a household where your parents or guardians were simply trying to make ends meet, keeping the utilities on, and put food on the table. Personally, I saw my father work very hard to provide a comfortable household for my four siblings and me. He was a single parent, struggling to supply shelter, food, and clothing for children growing out of clothes monthly. If your household was anything close to mine then saving was not a hot topic of conversation. I learned as a child, the ability to have a healthy financial future must start at an early age. We must be taught to value money and live beyond the moment. It is our duty to talk to our siblings, nephews, neices and cousins about saving and its importance. It is in our power to change the paradigm.
With the modern day convenience to access credit and pay for our wants, we often put off saving for the future. The thought of saving money for that new television, vacation or pair of shoes is hampered by the ability to use someone else’s money (i.e. MasterCard, American Express and Visa). The interest paid on the borrowed money could easily be used to save for the future. Instead of paying interest, you could be earning it; this brings me to the first step to increase your saving ability.
Step I: Credit cards should be used modestly and not as a means to satisfy a want without any plans to pay off the outstanding balance within the very near future (3-6 mos.).
Studies show that African-Americans are saving less than their Caucasian counterparts and just slightly more than Hispanics. For example, as a population we save at a rate of 10% less in comparison to Caucasians and only 1% more than Hispanics. This means we are not prioritizing saving. Given that African-Americans spend more than they can afford when compared to Caucasians at a rate of 19% higher, it’s a disturbing trend to say the least. We must do better. Couple these findings with this current recession, African-Americans are falling further behind in building financial security for their retirement years. This underscores the next step.
Step II: African-Americans must take a hard look at their long-term life goals (e.g. retirement, paying off mortgage, college for kids, etc.) and adjust their spending and savings accordingly. It will require discipline.
It is understood that many in the African-American community either are unemployed or under employed. Saving for the future still must be a priority, even if it’s a small amount.
When I have to “rob Peter to pay Paul” every payday, then saving is not a priority. It might mean your debt is out of control which can also inhibit your ability to save. The end result of not saving is perpetual poverty within the African-American community and maybe for you and your family. Do not solely rely on the government (social security) to be your safety net. If social security exists when we get to age 65 or 70, it should supplement, not replace your income.
There’s lots more to say on savings and so look for Part II of this article right here soon! Start your savings plan today.
Ronald Wadley is a Director, Financial Planning & Analysis for a non-profit member based organization and contributor to healthyblackmen.org.