Shifting to a mindset of creating good financial habits could potentially help Black people take more control of managing their money and gain great value from doing it.
There are compelling reasons why such actions should be examined. Some 60% of African Americans are not saving for retirement, including 58% of non-retired respondents. And 54% of Blacks report they tend to spend more money than they earn. The findings are from Matt Brannon, author of this study. “I’d urge them to consider fixing that as soon as possible. You don’t want to let another year go by and start 2025 with the same problems you have now.”
Further, 84% of Blacks regret not doing more to improve their finances in 2023, 65% struggle to afford basic expenses, 61% say finances are the most stressful part of their lives, and 33% went deeper into debt last year. Some 41% contend money does buy happiness, and 29% say financial health is more important than personal health.
Now could be a good time for people to think in the longterm how they manage money, as inflation is not as high as a year ago, Brannon said. “That gives people more breathing room to be deliberate about saving and investing.”
An online real estate education platform, Clever Real Estate paid for multiple consumer surveys in 2023 to get a take on how Americans feel about their finances and the state of the economy,
Brannon shared with BLACK ENTERPRISE a few ways that people can improve their financial situation:
1) Make your money work for you
Too many people leave their money in savings accounts that earn little to no interest because moving that money seems inconvenient. If you have emergency savings or want to earn interest without playing the stock market, consider moving your money to a high-yield savings account (HYSA). You can earn hundreds of dollars over a year by simply letting it sit there.
2) Prioritize high-interest debt
If you have $12,000 in savings and no high-interest debt, then an HYSA is a great idea. But if you owe $2,000 in credit card debt, you should prioritize paying that off first because the annual interest rate (around 25%) is much higher than the yearly interest rate you get in a HYSA (about 4-5%). You still want to keep money around for emergencies, but try to pay down high-interest debt when possible.
3) Create a budget
If you’re looking to fix your finances, you need to figure out which of your expenses are wants and
which are needs. Consider using the money you save by cutting down on “wants” to pay down debts or build what you save and invest. Don’t chase happiness by making unnecessary purchases. A recent study showed people who budget and save more are happier.
4) Increase your income
Unemployment is low right now, so take advantage of that. Not all available jobs are desirable, but some perhaps will fit your skillset. This applies to switching primary jobs to boost your income, as well as taking on a weekend job or some gig/freelance work.
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