Adulting is the real world – real rent, real bills and real student loan payments waiting to be collected. But most importantly, real goals.
During Episode 41, Joymarie and Cortney dive into how our relationships with money are formed, spending triggers that sometimes set us back from our goals and the importance of developing healthier financial habits. Ultimately, the journey to a healthy relationship with money begins with intention, planning and discipline. Together, these three can help transform the way we value, save and spend our money.
Here are 8 actionable tips to help you on your financial journey.
1. Define what financial freedom means to you
You have to know where you want to go in order to get there. Setting clear intentions on lifestyle goals gives you a better idea of what you need to build in the meantime.
What steps can be taken to help you afford your dream lifestyle 5 years from now? What current habits are adding to or taking away from your future goals? What can you do more of or less of to make it happen more efficiently? These are the things we have to ask ourselves if we’re serious about bringing our financial goals into fruition.
Taking inspiration from Aunty Oprah, we could all learn a thing or two on defining what freedom means to us. Create your own definition of financial freedom, and instill—or eliminate—your habits accordingly.
“To wake up in the morning, decide for myself what to do with the day, not encumbered by anyone else’s definition of what it means to be me, or what I should be doing.” – Oprah Winfrey
2. Have multiple savings accounts
Nothing brings peace of mind like knowing you have a cash cushion to tap into if needed. Whether it’s for debt, vacations, emergencies, drop-in trips to Sephora, surprise Beyoncé concerts, etc., allotting funds to goals of your choice encourages you to spend and save more wisely.
Savings accounts create more balance overall because you’ll know where your money is going. Plus, there’s various options for saving, from apps, to automated accounts, to manual deposits, to going old school with a change jar in your room.
If you want to #BankBlack, OneUnited Bank—the first Black internet-based bank committed to improving the financial status of African Americans—offers free online banking and minimal fees. Learn more about their services here.
3. Check your statements
Looking at the numbers allows us to face our financial reality. How much money are you spending each day at lunch? Each week? Each month? When we can accept our money truths, we can then figure out what we need to improve.
Whether it’s adjusting our grocery list for meal prep, limiting that after-work rendezvous with your favorite happy hour menu or purchasing those cute shoes you know good and well you didn’t need, seeing these expenses can help us better manage our current spending habits.
4. Pay off your debt
In 2015, Prudential surveyed 1,043 African Americans regarding their financial experience. Approximately eight in ten African American (79%) respondents have at least some type of personal debt.
At some point, we’ve all experienced piled up bills or calls from Sallie Mae that leave us feeling anxious about our next money move and there’s a clear link between debt and stress. According to American Psychological Association study, 72% of American say they feel stressed about money.
Debt can stall us from reaching other short or long-term financial goals, while also hindering our emotional states of being. Set deadlines to pay off your big debts, small ones too. Making it a priority to diminish your debt—even little by little—is a positive step forward. Have an end goal in mind so that debt doesn’t have the power to steal your joy, can I get an amen?
5. Create a budget
I know, the word budget makes me cringe, too. A budget makes you more disciplined and aware of your financial reality. As your self-control grows, you’ll be able to limit those last-minute-impulse purchases we’ve all fallen victim to.
You’ll be able to know exactly where your money is going, properly plan for future goals and become more disciplined in how you manage your money.
6. Make a fun fund
Can’t forget to add a fun fund to the budget. We all work hard, and deserve to reap the fruits of our labor. Let this be your guilt-free place of happiness and much needed me-time therapy. Positive spending habits are key!
7. Carry cash
Swiping a debit or credit card gives us the illusion that we’re not spending as much as we think, since we don’t physically see the money coming out of our accounts. Let’s be honest with ourselves, we’re not on black card status—yet. You can better track what’s going in and going out if you use cash.
Candice Marie, founder of Young Yet Wise, helps urban millennials reach their financial goals their way. She leaves us with this tip: “When in doubt use cash. It gives you restrictions, keeps you on track with other money goals, and once it’s gone, that’s it!”
8. Get financially educated
“African-American households generally don’t know as much about money and financial literacy compared to mainstream and upper-middle-class white communities,” explains Teri Williams, president of OneUnited Bank.
A valuable first step is to take advantage of financial resources near you. Research financial literacy programs that can help you learn more about proper money management and planning. For instance, New York Public Library offers a free Money Matters program that covers financial statements, credit and debt, investing in stocks, budgeting and more.
Tune into Episode 41 to hear more about Joymarie + Cortney’s experiences with money habits paired with stories from our listeners and tips to help keep you #financiallywoke!