Do you have big dreams for your future self? What do you want to see yourself doing? Black Women now have amassed more wealth than our previous generations, and we have more options to earn wealth. We have a new frontier in financial planning with all the new changes. Ask yourself: what does it mean for you? The one thing to remember is that it will have a unique view depending on your situation and goals. It can range from maxing out your 401k to saving for a home or doing automatic bill pay. We can agree that financial wellness requires a plan. If we can prepare our finances the way we plan our next vacation, you can imagine how different our relationship with money will be.
If you are starting your Financial Wellness journey or need an extra boost, here are five topics to consider for your finances: 1) Budget: This is the house on which your money can be built. Understanding where your money goes is vital and will guide you on other aspects of your money. The general guideline is 50 percent for essential expenses, 15 percent for retirement, and 5 percent for savings. Staying disciplined and educated while pursuing financial goals can have a direct, positive impact on your economic mobility. 2) Credit: The reality is that we need credit. We will need it for future loans, our future home, and everything in between. Just like we are supposed to go to the doctor once a year, we must do a credit check yearly. 3) Debt: Hear me out. There is good and bad debt, and a way to use it to your advantage. Having a budget for paying off the high-interest debt first and other loans will free you to contribute to your retirement or boost your savings plan. So yes, debt is part of our financial makeup and, when managed properly, may help improve your financial well-being 4) Invest: Historically, there have been gender and racial investing disparities, but as Black women continue to amass more wealth, we must invest to build our wealth and close that gap. Looking at where the markets are right now, it can feel like a bitter pill to start investing. But I'm going to tell you the best way to pay your future self and to outpace inflation is to invest. And the best time to invest was yesterday. Being in the market is more important than jumping in and out of the market every time it goes south. The long term is better than what's taking place in the short term. 5) Retirement: Think about how you want to spend your retirement days. Having a retirement plan is one of the starting points of having people invest. What can you do? Open an account and have automatic contributions. If you have an employer match, meet the match! What I want all of us to do is take care of our present self and future self. These are the five actionable steps we can take to do so. Your long-term financial wellness is more important than chasing the hot dollar. Investing takes time and a methodical purpose. Let us make choices that are good for ourselves today and tomorrow.
To further explore the basics of budgeting, credit cards, debt, investing, and retirement, you can play Fidelity’s free online game, Five Money Musts.