Many people know what it’s like to worry about money. For some of us, it means living paycheck to paycheck and worrying about our job. For others, it means stressing out about whether we will have enough put away to retire.
While many people feel this way, it’s even worse within the Black community. A recent study by the Massachusetts Mutual Life Insurance Company found that 45% of African Americans who make $75,000 or more per year still feel more financially insecure than people of other races. The study had some other grim statistics. It concluded that 41% of African Americans are worried about making ends meet.
The reality is that higher income does not necessarily lead to financial security. There are many reasons that may be beyond our control such as job instability, health issues, etc. However, there are some areas where we have more control that could bolster our financial security. Here are some tips:
1. Pay Off Debts
One thing that makes us all feel financially insecure is our debts. Everything from credit card and car payments to mortgage payments eat away at your paycheck every single month.
To feel financially secure, try to pay off as many debts as possible. Focus on one payment at a time and pay more than the minimum payment each month. Once it’s paid off, start doing that with another debt and use the extra money you now have to pay it off even quicker.
Slowly but surely, you become debt free. This means having more money throughout the year, improving your credit score and brings the great feeling of having peace of mind.
2. Have an Emergency Fund
Another thing that makes us feel financially insecure is worrying about a financial emergency. For many of us, an unexpected medical crisis or job loss could threaten us with bankruptcy.
This is obviously stressful. One great way to combat this stress is to automatically put money away into an emergency savings fund. Ideally, this fund will have enough money for you to pay your bills and buy food for a minimum of three months.
This is one of the best methods to find financial peace of mind. You’ll be able to breathe easier knowing an unexpected emergency won’t completely derail your life.
3. Put Money Away for Retirement
Retirement is meant to be a happy time. We get to kick back, put our feet up, and enjoy being surrounded by happy children or grandchildren.
However, retirement seems further away than ever. Many of us have not put enough money away and worry about having to work for the rest of our lives.
There are ways to easily put away for retirement, though. First, contribute to your 401(k) if your employer offers one. Money goes into this before it’s assessed for taxes, so you can put more money away without feeling the financial crunch.
Speaking of your employer, take advantage of the situation if they offer to match your 401(k) contributions up to a certain amount. This helps you put more money away at no extra cost to you.
The final two steps are to open an IRA and to use apps to keep track of your spending. IRAs are a good way to build a nest egg for your golden years. And apps can help you track how much money you spend on different things every month. You can figure out which expenses you can cut and then put them towards debt payments, emergency funds, or retirement!
Feel Financially Secure Every Month
At OneUnited, we strive for #BlackExcellence in all things. This includes making sure the entire community feels financially secure and is able to look to the future with hope instead of fear. Use these tips to make sure you’re always spending today planning for tomorrow and you’ll have the financial peace of mind of your dreams!
