Halloween, Thanksgiving, Black Friday, CHRISTMAS and you’re still on your self-care journey? I get it, trust me. It can be rather overwhelming. Especially! In your pockets. Rona sure may have had us all on lock-down, prohibiting us from going out and making terrible spending decisions, but she sure can’t take away our online shopping habits! (HAHA SUCKER!)
Well...truly jokes on us! According to the NY Times, we’ve been spending 1.9 percent more since even September. Sounds small? Think again, because that number is actually twice as much as previously predicted and definitely can add up under these circumstances. Although consumer spending is what the economy needs to stabilize and stay afloat; as consumers, we must critically think about our spending habits and practice healthy financial self-care. Doing so will allow us to afford yet again our weekly pilates classes and fall pumpkin themed self-care routines.
@BlkGirlMoney_ “is a digital brand and community built to empower women of colour globally to learn about money.” As I have a few money burning questions myself, I took the opportunity to invite @Blkgirlmoney_ to the Power Room. There we discussed financial self-care, budgeting, spending during the holidays, and the best way for me to reach my goal of $9,071,998 by 30 years old. And yes! That number also happens to be the day I was born, 09/07/1998. Here’s what @Blkgirlmoney_ told the Power Room:
What is Black Girl Money and what are its objectives?
Black Girl Money is a multimedia brand, built to empower black women, to teach them about finances and about money. The main idea is to teach about wealth accumulation and generational wealth in the black community, especially black women, to give them an independent mindset. For them to be able to say “ I can enter the world, enter a career, fend for myself, and not just survive but be free, have the financial freedom to travel, buy a house”.
What does financial self-care look like to you?
Finding a way to budget and being happy in that budget. As much as I save and as much as I invest and budget, I always ask myself if I’m not happy then why am I doing it. Financial self-care to me is freedom. However, it’s also okay to rest, we’re constantly working and finding ways to make money and it can be overwhelming. As I am growing, I am understanding the importance of rest. Resting is equally as important as the rest of your goals. And treating yourself once in a while, don’t splurge on the next designer bag but treat yourself.
What are the misconceptions around making money and how can we tackle them?
The number one misconception is to accumulate wealth you need to be the next Jeff Bezos or you need to have inherited a large sum of money. That’s the number one misconception from what I’ve seen. People usually think that they can’t be wealthy if they don’t earn six figures. You can make money even if you have 100 dollars or pounds in your bank account. Because the idea is that money makes money. It’s a mindset, wealth is a mindset.
The other misconception is that investing is gambling. A lot of people think if I invest in the stock market I am gambling with my money. The number one thing people say when I talk about investing is “ it’s great that you’re doing it, but I just can’t play with my money like that.” Investing is not gambling. Investing creates a safety net for your future. If you know anything about the economy is, if you do your research and understand it, whatever you invest in today will always in ten years from now be worth more than if you left it in a savings account.
As a millennial, what are our best strategies for saving considering our lifestyle (student, part-time workers, etc..)?
Obviously, first, open a savings account. One thing you should do is as soon as you get paid is to make saving a priority. What would happen is if you get paid $1,000 a month and want to save $400 ,when you put that into your savings first, you’ll be forced to live on whatever is left. You’ll find that when you are forced to live on whatever is left, you can live on what’s left.
Take your cards off your Amazon and Pretty Little Thing account, whatever you spend your most money on, because next time you need to shop for something you’ll need to go reach for that card and put those details in. Simply that action of taking your card and putting in that information, subconsciously, you start to ask yourself “ do I need this, do I want to do this?” It’s so easy to click and buy, if you add one more step, you start to reflect a bit more.
Understand the need for emergencies. Corona virus is the perfect example of the lack of financial education globally. So understand that you are saving for a rainy day. You don’t know when the next economic crash is going to happen or unemployment, so always have something in your savings.
What steps should a budgeting virgin take to start budgeting effectively?
Have clear goals, write them down. You can’t succeed in budgeting without goals.
Evaluate all your income. You need to get all your sources of income such as employment, investments then take away your taxes.
Calculate your expenses.
Use the rest to budget in your goals. Once you’ve already evaluated your income and calculated your expenses whatever you have left is called your disposable income. You can then use that and cater that amount towards your goals, that’s why you’ve set them in the first place.
Instead of using credit cards as crippling debt, how can we leverage their use to our advantage?
Credit is a requirement. The gist of a credit card is to build a credit report in case you need to borrow. Get a credit card as soon as you can, as soon as you are eligible. However, you need to treat your credit card as a debit card. Don’t spend money that you don’t have just yet. Don’t see credit cards as free money but see it as a means to an end. See it as I must make this investment in order to have a good credit report.
Don’t spend money you don’t already have. If I get a credit card today, I am going to set up a direct debit. I already have that amount of money in my debit bank account and I am using the credit card for credit card purposes. At the end of the month, that direct debit goes into my credit bank account.
Shop around for credit cards. Get one that fits your lifestyle and offers the best rewards. Be a cashback queen, it’s basically free money so why not cash it out.
Don’t pay the minimum payment. People don’t realize that when you only pay the minimum payment you increase your debt because of interests that keep growing. Try and pay whatever you’ve spent that month instead. It leads you into the debt trap.
For inspiring entrepreneurs who want to reach that millionaire status by 30, what are some tips you have for them?
Invest. When you work and start a business, you’re still trading your time for money, you’re putting money into that business. What the wealthy know is that money makes money. Have your money accumulates more money by doing your research on compound interest. Compound interest is like the 8th wonder of the world. Understand how it works and learns how to invest.
Find something you are really passionate about and make a business out of it. What I’ve realized is for that business to work you need to put in hours, you need to be up at 5 a.m so if you’re not passionate about it then chances are you won’t be very successful at it. I’m waking for me!
Have multiple streams of income. It’s very hard for anyone to become a millionaire by 30 with just one source of income because that same income is what you are living on as well. Which is where again investing comes in, because that is passive income. You’re essentially making money in your sleep.
There are many opportunities for you to make money. You just need to find it!
Lastly, shameless plug, tell Power Roomies where they can find you?
@blkgirlmoney_ on Instagram, we have a website, podcast, and Youtube channel launching very soon!