Black women are now the most educated group in the country, which means it’s natural we have more money at our fingertips. However, as anyone who has ever dealt significantly in the financial arena knows, just because you make money that doesn’t automatically mean you know what to do with it.
It’s easy to neglect investing, saving and making other sound decisions with your money, in favor of spending it on things you want instead of things you need to provide you with a comfortable life long after your working days are behind you. Culturally, Black people don’t utilize their finances the way they should in comparison to their non-white peers, but that has a lot to do with not making as much and being afforded the same opportunities.
When you know better, you do better, so we spoke to Tiffany Aliche (known as The Bugetnista) and AttiQuewa Green (known as That Finance Chick), black women who are financial experts and filled with sage advice, to give us some tips on how to get your finances to where they should be and how to make your money work for you even while you’re sleeping. This is the year to level up…and that definitely includes your finances!
Hello Beautiful: What do you think are the biggest obstacles between black women and their finances?
Tiffany Aliche: The biggest obstacle for black women surrounding their finances is thinking that we need to manage it all on their own, and asking for help is a sign of weakness. Reaching out for help is a sign of strength.
I had a period after getting laid off from my job where I felt ashamed. It was isolating. Nothing gets solved in isolation. This is what’s so powerful about my Facebook forum, the Live Richer Dream Catchers Group.
Over 300,000 members are in the group. I see women daily getting support from each other. They share stories of how getting advice on building credit, repaying debt, and saving has completely changed their financial outlook.
AttiQuewa Green: I think the biggest obstacles black women have when dealing with our finances is finding a way to end the cycle of financial illiteracy for ourselves and finding our financial comfort zone to meet our goals.
Often times, it’s up to us to learn how to “do better” with our money when we didn’t realize there was an issue in the first place. Then once we get over that hump, we have to silence the voices around us saying that our ambitions are too much for our current circumstances.
For example: for the woman barely making ends meet aspiring to make six figures so she doesn’t have to figure out which bill not to pay for the month and maybe be able to travel once in a while. Or the most insulting obstacle in my opinion, silencing the old traditional or insecure voices telling us not to intimidate our men by making more than them.
HB: How do you feel about the belief that black people lack the abundance of generational wealth of other races, thus leaving them behind financially?
Aliche: History’s impact on our ability to generate wealth can’t be ignored. But I don’t believe that the black community lacks the capacity to build wealth for future generations. Abundance is all around us, we just need to give our community the right tools to accumulate it. Creating affordable tools with strategies to build wealth is my passion.
Green: I believe it’s true. The historical events involving slavery through mortgage redlining has set us back tremendously, but I also believe that we don’t have to stay where we are. We cannot continue to play the blame game as it does nothing for us. It’s all about educating yourself, your family & community to get ahead. There are so many tools and resources available to us that can allow us to create generational wealth including, but definitely not limited to, having multiple sources of passive income.
HB: At what age do you recommend sitting down with a young black woman and teaching her the basics of financial responsibility?
Aliche: I’m working on a children’s book right now teaching children how to manage money. I also worked on a financial literacy bill to make financial education required in schools. The basics of financial responsibility should be taught to young black women right along with reading and writing at a very young age. Simple lessons like saving an allowance and giving back has a long-term positive impact as they transition into their teenage and young adult years.
Green: As soon as possible. If they can talk, they can listen. It’s all about creating great habits young because it’s way easier than having to break bad habits as an adult. Unfortunately, there are a lot of people with the mindset that “kids should be kids” or they need to stay in a “child’s place” not realizing that they are stifling them. Your childhood is about learning life lessons you’re going to need as an adult and the sooner we can adopt that mindset they better off our next generations will be.
HB: With the uncertainty of the current administration, what advice do you have for black women to secure their financial future?
Aliche: Don’t let fear or uncertainty scare you into inaction. The news can be depressing, but there are moves you can make within your control. Of course, vote — locally and on the national level. Entrepreneurship as a means to building generational wealth is another way to secure your future. Developing multiple streams of income is advice I always stress. You never know when you could lose a job or lose a salary in your household. Having a side business can ease the financial blow. A side hustle can also grow into a full-time job or a company that you can pass down to future generations.
Green: Definitely have multiple streams of income! It is a must! Also, prepare for your future by saving now, making safe investments and taking advantage of the current tax laws when looking at investing and growing your money as well as have the best credit you can possibly obtain.
HB: What financial mistakes do you commonly see black women make that they need to change?
Aliche: Living beyond means is a common problem I see with black women, but the good news is this isn’t such a terrible problem to have. You can rectify it by taking a hard look at your spending habits, downsizing, and creating a good budget. I was able to save about $40,000 in a few years on a teacher’s salary, so cutting back can be done even if you’re making a modest salary.
Green: Not having multiple sources of income. Living a life that they can’t afford. Not planning out their financial future. Letting other people have an influence over their money (significant other, friends, family “black tax” & jobs.)
HB: If you could narrow it down to a few specific tips, what advice would you give a black woman about her finances?
Aliche: Know it’s not a race. As teenagers, we believe we’ll be married by 25, living in a McMansion by 28, and driving a Rolls Royce at 30. Then we get to 30, realize we’re sitting on a pile of student loan debt, and feel like failures. There’s no race. It’s a journey. Mistakes will be made. Financial security happens from learning and making smarter decisions over time.
Get your emergency fund together. An emergency savings fund is where you should put a few months’ worth of your salary. Don’t ever spend this money. Keeping a cash cushion will help you avoid having to rely on credit cards and other debt when unexpected expenses come up.
Protect your credit. Having good credit history comes with many perks like affordable loans and credit. You may think you’re a good friend, partner, parent, or cousin by co-signing for someone else, but their payment habits will impact you. Your needs come first. Work to keep your credit history clean.
Use your employer retirement plan. It’s never too early to start saving for retirement. Even if you can only put a few bucks away in your employer retirement account, do it! Work towards increasing your contribution to match your employer contribution. If your employer doesn’t offer a retirement plan, consider investing in an IRA or another retirement account.
Green: Outside of the usual “make sure you have a great budget, plan for your future, fix your credit & have multiple sources of income,” do not allow anyone to make you feel negative about your financial ambitions. As women, we crave stability and security and if people don’t understand that, that’s none of your business. Also, be sure to surround yourself with like-minded people. It’ll make your financial journey a lot easier.