Shola Dollar's Tips:.
Although I have not been able to facilitate financial literacy classes during the pandemic, I am still very passionate about it! Black History Month has come to an end and Women’s History month has started, the reality is that I am a black woman everyday and it pains me that back families and women have historically held the losing hand when we look at wealth disparities. Black women have been the hardest hit, especially during the pandemic. To know me is to know that I am not a pessimist and truly believe that that financial education can change some of the stats. To that end, I have included a few tips below that I encourage you to share within your network.
$ Avoid buying anything that depresciates that you can’t you can’t afford to pay for in cash or over a short period of time. That sounds pretty obvious; however, most of us have justified a splurge purchase at some point without having any idea of how and when it would be paid off. If you knew that $2,000 “sale” handbag that was put on your new Visa with a 15% interest rate would end up costing $3026, would you really want it? Probably not. Home and education usually don’t depreciate. I know most people finance cars, this is an item that should be financed for a short period of time so that you’re not upside down on your loan.
$ I know a lot of people have entrepreneurial goals; however, as someone who spent a large portion of her career in commercial banking - - - understand HOW you are going to make money before going into debt for your business. There is a reason lenders and grantors request financials and details on your business plan, you should hold your own bank account to that same standard. When working with lenders, they need to understand how they will be paid back and as a business owner, making money should be a consideration. This also applies to non-profit organizations - - - know how you will fund your programs and mission. Please note, I no longer work in commercial banking so everything stated here is my opinion.
$ Start an emergency savings account because life (and death) always happen. Did I hear anyone yell, “COVID-19”? Start by setting a $1,000 target and then working your way up to 3-6 months of living expenses after debt ha been eliminated. The amount you save is dependent on how long you think it will take you to replace your income if you anything happens to your job/business.
$ Prioritize eliminating consumer debt (e.g. credit cards, unsecured personal loans, equipment financing).
$ Save, self insure and/or get insurance to prepare for a time when you retire or are no longer able to work and /or die. Death related expenses are more than funeral costs, but include debt held on assets you own and would like to leave to a loved one (e.g home, car, things you typically pay for).
$ Seek out education and advice from financial professionals. Before investing in sou-sou, crypto currency (e.g. Bitcoin), the stock market or even your cousin’s basket weaving business UNDERSTAND your risk tolerance, the risk you are taking (legal or financial) and what you’re doing.
To help on the education front, I recommend:
- https://bettermoneyhabits.bankofamerica.com/en.
- engaging licensed financial advisors, planners, estate attorneys and/or CPAs. Also, understand HOW people get paid when when accepting advice.
Note: Although I have mentioned both sou-sou and crypto currencies, it is important to note that neither of these investment vehicles fit my risk profile, so please do not invite me