From early 401(k) plan withdrawals to not actively investing in stocks because that is for “old white people,” studies show Millennials rank near or at the bottom when it comes to financial savvy. Here are the top three Millennials’ money mistakes:
Millennials Money Mistake 1: Being All For The ‘Gram
Keeping up with the Joneses (or even the Kardashians) for the sake of Instagram can keep you in a world wind of purchases and outings you cannot afford. The continued pictures of you dining out, vacationing on a credit card, and costly “lituations”is an expensive lifestyle when you add it all up.
Yes, you can have fun, especially when you’re young. However, you’re not only losing valuable time, but if you find yourself spending more than you can afford, you will end up robbing Peter to pay Paul.
Just do the math—by time you have added up the cost of that lifestyle for even one year, you could have created your own “bank” by purchasing a new financial solution that offers a cash value via Index Funds. That way, you could vacation or even purchase a new car without putting your checking account and credit cards in the negative.
In this video, financial expert and advisor Robinne Alexander breaks down the other top two financial mistakes Millennials make.
Writing a Simple ‘Wealth Mission Statement’ Changed My Financial Life
by Adeola Omole
One simple statement changed my financial life.
Many people say they want to be rich. I was one of them. However, I was saddled with debt and faced a common dilemma—I didn’t have a clue where to begin.
That’s when I created a phrase that transformed my life from potential financial ruin to one of financial riches. When I began my financial journey I called it my Debt Motivation Statement. However, as soon as I paid off all my consumer debt and my mortgage, it transformed into a Wealth Motivation Statement.
Creating a Wealth Motivation Statement allowed me to stay on course and pay off over $70,000 of consumer debt in less than three years. It also encouraged me to pay off over $320,000 owed on my home in 12 years, and it helped my husband and I go from a negative six-figure net worth to a seven-figure net worth.
If you don’t like your current financial situation, you have the power to change it. As a wealth coach and author of 7 Steps to Get Out of Debt and Build Wealth, I’ve coached clients into their own successes using these same tactics. Here’s how I did it—and how you can, too.
Start with your ‘why’
When you begin to move toward financial independence you need to determine why you’re embarking on that journey.
If you are heavily in debt, ask yourself this question:
“Why have I decided to get out of debt?”
If you are debt-free and want to amass life-changing wealth, ask yourself:
“Why have I decided to build wealth?”
When I pose this question to my clients I advise them to focus on something they absolutely love. Their answers can range from having the option of quitting their day job so they can work at their dream job; being able to spend more time with their growing family by becoming a full-time stay-at-home parent; turning their hobby into a full-fledged business; having the financial means to travel anywhere in the world; buying their first home or their dream home; or attaining financial independence so they can choose to follow their life’s passion.
Refine your statement and think about the big picture.
Once you have figured out your “why,” ask yourself these additional questions:
- What hobby or activity do I participate in that absolutely charges me up, and results in me losing track of time whenever I pursue it?
- What one thing do I want to pursue in my life, and would pursue if there were no obstacles in my way?
- What legacy do I want to leave?
- What do I want out of life?
- What kind of lifestyle do I want to live?
These are tough questions, but the answers can help you redirect the energy you’re spending worrying over your debt into activities that give you energy to pay off your debt.
Real wealth is not just about having money, but is also about having the option to do the things you enjoy. I call this “Spend Passion Cut Junk”—spend time and money on your passion, and cut out the junk. Maybe your passion includes investing in appreciating assets, such as blue-chip stocks, and maybe your junk entails spending money on depreciating assets such as vehicles. This will vary for everyone. Find ways to spend more money on your passion, and less money on your junk.
Finalize your statement.
Here are some concrete steps you can execute immediately to solidify your Wealth Motivation Statement:
- Write down the things in your life that motivate you, and things that describe why you are embarking on the journey to financial independence.
- Narrow the list to the top five most important items.
- Cut the list again to your top two most important items.
- Next, ask yourself, “What one thing do I need in order to be fulfilled?” and select that one motivator from your list.
Now that you have narrowed your list to the one thing that motivates you, this will form the basis of your Wealth Motivation Statement.
Here is an example of a Wealth Motivation Statement: “I will pay off my debt and attain financial independence so I can pursue my passion in the creative arts, which includes creating music and paintings.”
Determining your statement will help you pinpoint what energizes and motivates you, and gets you in the right mindset to achieve your goals. It requires you to find the one thing you want in your life that you are willing to make huge sacrifices for in order to attain.
My own statement included “being completely debt free and attaining financial freedom so I would never have to rely on a creditor or employer for my financial future.”
Create a daily reminder.
Write your statement on a Post-It note and stick it in a high-traffic location in your home. Make sure to read the note each time you walk by.
If you want to take this strategy one step further—as I did—you can create a vision board that acts as a visual reminder of why you are pursuing your goal of financial independence. Include photos of the items that remind you why you are seeking a richer life. Maybe they’re photos of exotic travel locations, a new home, or whatever gets you focused on your future.
I credit this simple statement for making me rich, and for allowing me to live the life I have always wanted to live. Grab a pen and paper, and start creating a richer version of yourself.
Southwest Airlines Is Giving New Credit Card Holders a One-year Companion Pass
Credit card companies are well-known for offering great perks to new customers, but a new offer from Chase and Southwest Airlines surely takes the cake.
This week the credit card giant — which is already one of the best in the game for travelers — announced that for a limited time, people who apply for any of their co-branded credit cards with Southwest will not only be granted 30,000 miles but will also be able to earn a Companion Pass as a bonus.
What that means is if you apply and are accepted for the card you can then book free airfare tickets for a companion on flights throughout the year. All you need to do is pay the taxes and fees.
Of course, this offer does come with a little catch. In order to earn the sign-up bonus, once accepted, cardholders must spend $4,000 on the card within the first three months of opening it, Business Insider reported. The offer is only available until Feb. 11, which means you better apply now and start spending some serious cash as soon as possible. This Companion Pass also has one big restriction: It’s is only good until Dec. 31, 2019. (Traditionally, the points earned Companion Pass is valid for the rest of the same calendar year it’s earned as well as the entirety of the next calendar year.)
But still, going on a shopping spree may be worth it when you consider just how much you may be able to save on airfare for your next family trip, romantic getaway for two, or just a buddy weekend. Moreover, it’s worth it simply for being able to brag that you actually obtained a coveted Companion Pass in the first place, which is notoriously hard to gain off travel miles alone. As Business Insider reported, a Companion Pass is normally obtained when one traveler has earned 110,000 qualifying points with Southwest within a single calendar year, making it nearly impossible for mere mortals to get their hands on.
People Share Why They Don’t Use Financial Advisers; Some Alternative Ways to Get Financial Help
Many people just do not want to meet with a financial adviser despite the fact that using one may provide numerous financial advantages. Financial advisers provide objectivity of financial situations and give advice to help establish a more secure financial position.
A few personal finance professionals, authors, teachers and bloggers, from the Elevate Community, dedicated to uplifting people of color financially, shared their perspectives:
“Just Not Ready”
Just like weight loss, financial wellness is one of the top three new year resolutions and personal goals. Most people generally know what to do to improve their financial situation, but some are just not ready to do it.
“We like comfort!” says Andre Albritton of The Millennials Next Door. “A financial adviser will give recommendations outside of our comfort zone which can be a frightening experience.”
Money mantras like “save more and spend less” and “pay yourself first” have been stated by every financial expert. The reality is if a person is not mentally ready, they will not execute any plan.
On television, rich and famous people seem to be the only ones talking about meeting with financial advisers. This creates the perception that it takes thousands or millions of dollars to work with a financial adviser. The consumers living paycheck to paycheck with minimal or no assets (like a home, investments, etc.) may presume it is too expensive to meet with a financial adviser.
Many middle-class Americans are working hard to pay their bills and make ends meet. Paying to meet with a financial adviser may seem premature or unrealistic.
“People put off seeing a financial adviser for the same reason they avoid going to the doctor or dentist” shares Alfred Edmond Jr., Your Money Your Life Podcast host and co-author of Loving in the Grownzone. “They don’t want to deal with the choices, remedies, or lifestyle changes that will likely be necessary to improve their condition.”
People that practice avoidance in the hope that the problems will go away, or correct itself will deny the problem, and chose not to deal with the financial situation. Unfortunately, avoiding the dis-ease in the bank account will leave a person vulnerable to more financial hardships.
“People are embarrassed about their current (financial) situation and believe their choices got them in that predicament” explains Atiya Brown of Live Financially Savvy Podcast. “Since they don’t know the extent, they may tend to ignore and avoid.”
Almost 10 years ago, my pride almost put me in the poor house. I remember being ashamed to admit my major money mistakes and felt like a failure. I locked myself in a self-inflicted private prison of shame.
People suffer in silence because of their pride and the shame they feel because of making money mistakes. Making the decision to let go of the shame and ask for guidance will help to release the guilt.
Julien Saunders of rich & REGULAR states, “Some financial advisers have a tendency to be pushy. Although well-intended, some (financial advisers) can make a person feel pressured. Consumers must fully understand the implications, alternatives, or cost to them as the investor.”
Some financial advisers are perceived as product pushers. Product pushing financial professionals turn off and scare away many consumers. Even though consumers know that financial advisers sell products, they do not want to feel pressured into purchasing products they don’t understand.
People do business with people they like, know, and trust. Sharing secret financial skeletons with someone you don’t know can be extremely uncomfortable. It is even more frightening to give control of your money and assets to that stranger.
Patrina K. Dixon of It’$ My Money says, “Some people have trust issues. Therefore, if they do not trust the financial advisor, they will not be safe to share relevant information the adviser may need to assist the client.
Some Alternative Options to Using Financial Advisers
Many are not ready for the financial commitment to meet or work with a financial adviser. Here are some alternative options and resources to help you “start where you are.”
Financial Blogs and Podcasts
Financial blogs are an excellent resource for free money tips and strategies. Here are a few blogs and podcasts to check out.
Tanya Rapley’s My Fab Finance Blog teaches millennial women of color how to regain control of their finances, overcome financial challenges, and pay off debt.
Talaat and Tai McNeely host the His And Her Money Podcast. Their podcast and blog aim to help married couples reach their financial goals together.
Marsha Barnes’ The Finance Bar Blog connects individuals to their financial wellness. She offers one-on-one coaching and an app that shows where your money is going.
Online Financial Tribes
John Hope Bryant, the founder of Operation Hope stated, “If you hang around nine broke people, you will be the tenth.” Connecting with people who have similar financial goals or have achieved the success desired is essential to financial success. Here are a few online financial tribes to check out.
The Live Richer Academy founded by Tiffany Aliche, who is known as The Budgetnista, is a membership-based online platform that offers courses designed to help participants take their finances to the next level.
Founded by Sandy Smith, of Yes I Am Cheap blog, Hustle Crew is a private Facebook group community that provides resources on entrepreneurship and starting a side hustle.
Financial coaches educate clients on the basics of money and credit management. They help their clients establish financial goals and create a customized plan to reach those goals. Financial coaches act as accountability partners to encourage and challenge their clients to success.
Financial coaching services range free through a non-profit programs to a few hundred dollars per hour to work with popular financial coaches privately.
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YOUR MONEY, YOUR LIFE: EPISODE 6 – “Ways To Finance Your Emergency Fund”
Establishing and maintaining a cash emergency fund, with an amount equal to six months up to a year’s worth your annual living expenses, is a foundational principle of financial wellness. Author, speaker, and financial coach Tarra “Madam Money” Jackson answers the question of where to get the money to finance your emergency fund
The new personal finance podcast, Your Money, Your Life is sponsored by Prudential and hosted by Black Enterprise’s own Alfred Edmond Jr. This special series features a lineup of great guests, including The Breakfast Club’s Angela Yee; DeForest B. Soaries Jr., founder of the free Financial Freedom Movement; Tiffany “The Budgetnista” Aliche; and Jacquette M. Timmons, president & CEO of Sterling Investment Management. The show will cover money topics ranging from how to control your debt to our psychological relationship with our finance. A can’t miss!
NJ Assemblywoman Angela McKnight and Financial Blogger Tiffany Aliche Create Bill to Teach Middle Schoolers Money Management
Middle school students in New Jersey are about to get a much needed crash course in adulting thanks in part to two black women determined to make sure they have the tools they need to succeed. Assemblywoman Angela McKnight and financial educator Tiffany “The Budgetnista” Aliche worked together to draft and advocate a financial literacy bill that would give kids a fighting chance at the future.
A1414, will instruct the State Board of Education to require school districts to incorporate financial literacy instruction into curriculums for enrolled students in grades 6 through 8.
First introduced by McKnight in 2016, the bill was signed into law by the state’s Acting Governor (and first ever black Lieutenant Governor) Sheila Oliver this Thursday at Jersey City’s PS 34 President Barack Obama School. It was the culmination of three years of hard work on the part of McKnight and Aliche, who used her considerable platforms to assist with getting the word out.
“Early financial literacy should be an essential part of every school curriculum, because it’s a critical skill needed for success in adulthood,” said Aliche via press release. She shared portions of the signing ceremony with her community on social media, unable to contain her excitement. “Today New Jersey took a historic leap forward in helping our children secure a brighter future. Today was a manifestation of why I started The Budgetnista; to help give people the tools the need to live richer lives,” she continued.
Mcknight’s fellow Assembly Democrats Nicholas Chiaravalloti, Eliana Pintor Marin, Jamel Holley, Benjie Wimberly and Annette Quijano served as co-sponsors for the bill as well lending their legislative support.
While widely respected novels about opulent liars with questionable boundaries and near obsolete mathematical principles that have never shown up on the form to file an LLC have reigned supreme in the primary educational sphere, but not pratical financial information is being moved to the forefront. Information about things like the practical value of compound interest, or why it might not be the best idea to buy all those sweatshirts at the bookstore with your student loan disbursement check has been harder to find…but this bill helps to change all of this.
This law presents children with vital information that has the potential to change the course of their lives by preparing them to properly evaluate their finances and deal with debt as adults.
Regarding the bill, McKnight told Hello Beautiful, “One of the most important lessons a person can learn is how to manage their money. Many young people go into adulthood knowing little about finances, and end up making decisions that cost them in the long run.” She added, “Teaching our kids early about the importance of managing their money and making sound financial decisions can prevent them from making costly mistakes and set them on the right financial path.”
Hopefully, this bill will spread to multiple states.
7 Top Grants Or Free Money For Black Women Entrepreneurs [Updated for 2018-2019]
Women are the growing face of business given that 30% of all U.S. businesses–9.4 million in total–are owned by women. Of which, 14% are controlled by black women who are generating $52.6 billion in combined revenues and employing 297,500 workers. With the number of women starting businesses continuing to skyrocket, the greater the need for access to capital to help grow and scale these businesses. Yet, women entrepreneurs continue to get shortchanged when it comes to getting bank loans, venture capital, and angel investments. To help ease this barrier, there are a number of grants available to small businesses.
Here are seven grants black women business owners should consider:
SheaMoisture haircare and skincare products founder Richelieu Dennis announced a $100 million fund for women entrepreneurs of color at the 2018 Essence Festival.
From the girlboss website: “Grants are awarded on a biannual basis to individuals pursuing entrepreneurial endeavors. Each grant beneficiary receives project funding for $15,000, plus exposure through the Girlboss platform and community, as well as local and regional press.”
Share your small-business story and enter for a chance to win the top prize–$25,000. There’s also one $15,000 winner and eight $7,500 winners. Part of the judging involves the general public voting for the finalists, so participants may promote their businesses while garnering votes.
The MBDA is an agency of the U.S. Department of Commerce that assists minorities and women in establishing and growing their businesses. On its site, you can research grants and access links to state agencies that work with women-owned businesses for funding opportunities.
This program allows business owners to apply for financing a particular small business need. Worth up to $4,000 each, past recipients used their growth grants to purchase computers, hire part-time help, and create marketing materials.
Awards $500 to a different women-owned business every month. At the end of each year, one of the 12 grant winners is awarded an additional $2,000. The application is relatively simple: Applicants must explain what your business is and describe what you’d do with the grant money. The foundation’s advisory board chooses the winners, looking for women with passion and a good story.