Round 1: Financial (Dis)Honesty
How many of us can relate to being midway in our careers, but we are burdened with tons of debt from student loans and credit card bills. Living paycheck to paycheck with very little money to show for all our hard work. You’re not alone, there are many people living that reality, yet masquerading to the world that they have it all together. We’re all a part of the financial game, it’s your choice if you want to be on the winning or losing team. From poor credit to having no savings, many of these pitfalls are sandbagging us. For example, having poor credit, can prevent you from purchasing a home, renting an apartment, or even securing gainful employment. Many of us were never taught how to manage to our money, and we were taught the art of covering up our financial struggles from others.
The distrust of financial institutions, has haunted the African American community since the Reconstruction era (1865-1877) and still effect us today. Redlining in our communities, higher interest rates on car loans and subprime home loans have all aided in our inherent distrust of the financial system.
According to the Journal of Personal Finance, distrust in financial planners disproportionately higher in black communities. The journal argues that “experiences with discrimination may explain the pervasiveness of lower trust among blacks.” When faced with financial issues, black and brown people are less likely to seek help from a professional wealth management team. However, with clear goals and a sound plan, steps can be made to work towards a healthy financial future.
The first step towards clearing debt and preparing for our financial future is to be completely honest about our financial past. Because money is connected to our feelings of security, we sometimes skim the truth because we are embarrassed about our debt, or we feel it’s too intimate a topic to discuss with anyone else. However, avoiding the problems only make them bigger. The truth is, in order to save for and secure ourselves for the future, we have to make an honest assessment of our financial situation. By being dishonest, we stunt our ability to grow so we can free ourselves from debt and begin our journey to save.
Here are some common financial (mis)truths:
“I don’t have to worry about retirement just yet, I have years to work.”
“I can pay for that out of my savings.”
“I can file my taxes next year or a year later, while I sort out my issues.”
“I can use credit to buy it now, and pay it off later.”
“I don’t make enough money to pay down my debt and save.”
“I got this”
In the coming weeks, we will continue discussing why those lies are stifling your financial growth. In order to get a handle on your financial future, you have to educate yourself on the maintaining a healthy credit score, paying your taxes on time, clearing unnecessary debt, and saving for your future. Wealth Management Financial Advisors can help you gain control of your finances and get you on the right track towards financial fitness