The Art of Saving Money
William Reid, Founder, Roads of Gold
13 November 2016
Saving money is the very first step in building financial security. It is also the most difficult. This is especially true for African Americans. Only 50% of African Americans have an emergency savings account. There are many factors that contribute to this number: the hyper-consumerism of American society, the flippant attitude towards money by hip-hop culture, predatory practices of financial institutions on our races for decades, and the list goes on. The silver lining in this is with some time, hard work, and discipline, we can change our financial situation completely.
Becoming a skilled saver takes places in steps. The first step in saving money is creating a budget. The big b-word. Budgeting is reviled as a painstakingly arduous task in our community. Luckily in this day and age, technology has come to our rescue. Applications such as Mint and YNAB make it extremely easy to set and stick to a budget that will fit your needs. Tracking spending is a good way to monitor your good spending habits and bad spending habits. Is it necessary to spend $300/month dining out? Did you really need to make 40 trips to Starbucks last month? Was that stripper really worth $236.78? These are the questions you will need to ask and answer for yourself as your create your spending budget. Also budget for fun too. Just because you are saving money does not mean you have to deprive yourself of enjoyment. Quick saving tip: Do Not have a Miscellaneous Costs section on your budget. Every dollar should be accounted for and should have a reason for being spent.
Photograph by MrsCaleh
The best way to keep money in your pocket is to stop taking it out. Once you have your budget set and you know what your income and expenses are, it is time to start cutting. Call up your cable provider and drop a couple packages or get on a new package promotion. Call your credit card companies and request a lower interest rate. Use coupons when you buy groceries. Eat out less and cook more. Buy clothes on clearance sales or better yet at thrift stores. Shop around for cheaper home and auto insurance. Get on a less expensive phone plan. Get rid of memberships you never use. These are immediate steps you can take today to lessen the flow of money out of your coffers.
For those of you that want to take a bigger leap, downgrade your living arrangements if you can. Don’t pay for space you don’t need. Downgrade your vehicle to decrease or get rid of the car note entirely. Use public transportation more often. Cut the cord and lose cable entirely. Pay down debt. These are bigger steps you can take to take a huge chunk out of your monthly expenses.
“Remember that African Americans have $1.1 trillion in spending power. By keeping the bulk of that money in our own coffers, we will then be able to wield that mighty hammer for the good of our communities.”
Make Saving Easy
Tell yourself you are going to save $20 this week. Shoot for a number of dollars to save each week. Quantifiable short-term savings goals are easier to visualize and work towards than yearly savings goals. Avoid taking on new debt. Some debt is unavoidable, like a mortgage for a house. However, when you can avoid additional debt, do so. Have a separate account for money that you are saving. Take pride in allowing it to grow untouched. Avoid the temptation to dip into the savings to buy luxury items. Getting out of the American consumerist mindset is going to take willpower and discipline.
Grow your savings.
Photograph by TheDigitalWay
Saving money is the foundation of wealth building. Black people do a great job of saving when it’s to buy that new pair of shoes or that new dress. We have to also be able to save without the objective of purchasing luxury we don’t need. Avoid impulse buying at all costs. Remember that African Americans have $1.1 trillion in spending power. By keeping the bulk of that money in our own coffers, we will then be able to wield that mighty hammer for the good of our communities. Save your money so your money can save you.