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One of the most valuable lessons you can ever learn in life is financial literacy. This will not only assist you in achieving financial freedom in your own life, but it can also break generational curses involving finances with family and friends. As people of color, we have heard it before- the racial wealth gap is still prominent in the community, with white families still having approximately three times as much wealth as Black families. On TheBlondeMisfit, we’re here to do our part to help close that gap. Here are five ways you can take control of your finances and be on your way to financial freedom.
1. Change Your Mindset, Change Your Life
The first thing to do before you start getting your finances together is to get your mindset right. Always remember, the perception of yourself will always determine how far you will push the limits of your mind and achieve the goals you have set for yourself. “Before you have money, you need to be prepared to have money”, says Rashad Bilal, co-founder of the top-rated “Earn Your Leisure” podcast. Education is the foundation of financial literacy. You need to first assess your relationship with your money. What did you hear about finances growing up? How have those views shifted into adulthood and the way you handle your finances now? Take this quiz to find out what your relationship with money looks like so that you can take that next step in properly educating yourself.
Once you have a good idea of your money mindset, check out resources like Clever Girl Finance to put that knowledge to work! Founder Bola Sokunbi created the brand to elevate the community with blog posts, podcasts, courses, and books that will encourage your financial education journey.
2. Budget Out Your Finances
Now that you know more about your own personal finances and the way you view money, let’s put that newfound knowledge to work. How can you gain all of this financial understanding and not know where your money is going? That’s why a budget needs to be in place to keep track of your spending. To stay organized, I suggest a planner like this one with built-in personal development tools such as a budgeting or goal-setting section.
Another thing you can do is follow The Budgetnista. Tiffany Aliche launched this company to make budgeting and the concept of financial freedom digestible to the average person. She transformed her “commitment to education into legislation when she partnered with Assemblywoman Angela V. McKnight to write a bill that later became Law A1414 (The Budgetnista Law). This milestone legislation made it mandatory for financial education to be taught in all middle schools in the state of New Jersey.” Throughout her years as a financial educator, she has “created a financial movement that has helped over one million women worldwide completely transform the way they think about their finances.” Through her podcast episodes, blog, and financial literacy resources, she’s altering the way we budget.
3. Consolidate Your Debt
Next, let’s take a look at your debt. (Don’t worry, after we discuss this financial step it won’t be so scary!) Consolidating your debt is one of the easiest ways to take control of your finances. The student loan debt crisis is one of the principal elements stopping you from achieving your financial goals. Americans overwhelmed with debt use this financial strategy to merge “multiple bills into a single debt that is paid off” with a payment plan or loan if you’re qualified. It reduces the interest rate on your overall debt by having one payment per month. That’s just one of the many keys to get out of debt.
4. Invest Where You Can
Even though it might sound alarming to beginners, investing can transform your life. Unfortunately, the privilege of passing on financial knowledge falls short when it comes to minorities in America. According to recent studies, the median Black household holds just 10% of the wealth of the median white household, which also makes a white man’s median net worth 100x higher than a Black woman’s, according to the Federal Reserve. This video is perfect for beginners wanting to learn more about getting closer to their financial dreams by investing in the stock market.
5. Diversify Your Income
Once you’ve mastered the art of budgeting your money, lowering debt, and investing, it’s time to start thinking of how to find ways to earn more money to establish your financial future. The best way to do that is to create multiple streams of income. No more relying on that one paycheck from the job anymore. Consider turning a passion project into a profitable business like Nicaila Matthews Okome teaches on her “Side Hustle Pro” podcast.
Or if you want to follow the most popular investment strategy that 90% of millionaires use, try your hand at real estate. I know the initial thought may sound intimidating at first, but consider all of the resources out there for you to take advantage of. For instance, take Mark Whitten who teaches the Black community how to build generational wealth by acquiring real estate through workshops, reading materials, his YouTube channel, and Real Estate Money Club. I gained a great deal of insight into what it takes to become a successful real estate investor when I attended one of his real estate seminars.
Keep in mind, it’s a marathon and not a sprint. Take it one day at a time and remember to apply the knowledge as you go. Now that you have a better idea of how to really take control of your finances, get out there and achieve your financial goals!
What are some other ways to take control of your finances? Don’t be shy, share the knowledge. Let’s discuss!
