Written by Erickka Sy Savane
Actress Kerry Washington, who is working with the AllState Purple Purse campaign which works to fight against financial abuse for women who are experiencing domestic violence and can’t afford to get out of the relationship, recently raised the question of “financial literacy.” It brings up a very good question for many African American women who are particularly vulnerable because we aren’t traditionally taught about finances in the home.
What key things do we need to know about money and finances so that we are moving powerfully in the world? Because the truth is, with the current administration on a mission to cut billions of dollars in everything from social security, pensions, Medicaid, and the air that we breathe, we can’t afford to stay financially illiterate.
So to give us a healthy dose of wokeness in this area, we elicited the help of financial expert Lola West, partner at WestFuller Advisors, a boutique money management firm based in New York. For who the past 17 years, Lola has been educating African Americans about budgets, investments, retirement planning and our overall relationship to money. She can take us on the fast track to financial literacy so we can set ourselves up powerfully for the future!
On what it means to be financially literate
Financially literacy means that you take responsibility for the money that you have and you do the research to figure out what it is that you need to take care of yourself and your family.
The most important question to ask yourself on the road to financial literacy
How much does it cost to be me? ™ If you don’t know how much money it cost to clothe, feed, groom and entertain yourself and your kids or how much you spend on coffee or lunch on a daily basis, then you need to begin to write it all down, or track your credit card spending, because this is essential to being financially literate.
Why financial literacy is imperative
Financial literacy puts you in control of your own destiny. What’s happening in this country with the current administration is a wake-up call for young people who need to understand that social security and Medicare is not guaranteed. You have to be responsible for your later life, and it’s not okay to say, “nobody told me.”
Steps to becoming financially literate
• Save 10 percent of your paycheck right off the top and put it away for a rainy day
• Sign up for the 401 K plan at work
• Create a budget and live within your means
• Stay informed
• Stop being an ATM for family and friends
Benefits to being financially literate
When people are financially literate they see that being in charge of their finances is not out of reach and the anxiety is removed. People stand differently and have much more power. It makes a huge difference in people’s lives.
Consequences of being financially illiterate
Ignorance lessens your ability to function as a whole human being, and if you don’t know anything about how to handle money you’re vulnerable to people’s schemes. Unless we talk about money to women, men, and kids, we are doomed to keep repeating the mistakes that our ancestors made. Though it’s important to note that our ancestors weren’t taught about wealth and how to live responsibly. We have to educate ourselves.
Building financial literacy in our kids
When you don’t grow up talking about money you’re duped by whatever another person wants you to believe. Talk to kids about money as early as 5 or 6 years old, when they’re curious sponges that want to learn. The issue we have with kids nowadays is that we use credit and debit cards so it’s rare that they see actual cash, so there’s no consequence to spending. Explain to them the concept of money and how it works.
The financial literacy mindset for the underdog
For those who are taking no action because of bad credit or poor financial decisions from the past, ask yourself how you want to feel about money? Do you want to feel empowered or depressed? If you choose to feel empowered call a credit card company and get someone to assist you in setting up a payment plan. Google how you can fix your credit. Go to the library and read. Education is the foundation for everything and we’re only slaves in our own minds. Ultimately, know that you can do it and there are people out there who can assist you today.
Find Lola West at WestFullerAdvisors!
What do you think about these tips on financial literacy? Are you currently practicing any of them consistently?