"76% of black consumers have reported they are living paycheck to paycheck"
We've all heard of the saying, "robbing Peter to pay Paul."
This has been an idiom that takes the money or resources that were intended
for one purpose, and then use them for another. Which often just shifts the debt
in this wheel that seems as if will never have an end.
Our biggest wealth building tool is our
income, and so often black people are
not always earning as much as their white counterparts. Although the racial wage gap seams to be reducing, it still has a
way to go. Nationally, black people make 76 cents to the dollar of white people, according to the Department of Labor.
But we as Black Americans are sick and tired of being sick and tired and are seeking higher education, becoming business owners so that we can obtain those higher salaries and earning potential in turn that builds generational wealth and not become the status quo bias by educating ourselves on better savings and investment opportunities.
"So how can I stop the perpetual cycle of poverty?"
Simply shifting the mindset to get and stay out of debt. It seems more simple than what often our circumstances allow us to do. Because the offset of income is through the borrowing of funds to pay for the necessities of life, such as credit cards to charge the groceries to eat, car note for that vehicle to get back and forth to work with, mortgage for the dwelling we need to have shelter in, and so often those student loans to achieve those degrees that will allow us to increase our income.
Proverbs 22:7 says, “The rich rule over the poor, and the borrower is slave to the lender.”
One way you could do this is by understanding Dave Ramseys 7 Baby Steps, this will set a foundation to financial freedom. This will look like a drastic change in your way of living by going on a strict budget. You have to make your money do what you tell it to do instead of it telling you what you CANNOT do. Take back that power by having an intentional plan that allocates every dollar to those necessities and not to those desires.
"Are you adapting the 50/ 30/ 20 rule in your life?"
The 50/30/20 rule is a recommendation of your budget in which you place 50% of your net income towards needs, such as housing, food, utilities, then 30% towards wants such as clothing, entertainment, subscriptions, and then the remaining 20% into a savings.
The 50/30/20 rule can be a good method for some but not realistic for most. This method will depend on your income, where you live and the disposable income that you have left.
Be sure to ask your employer if you can automate your earnings into separate accounts at your financial institution if you are paid by direct deposit. Example, you could have 20% allocated in which 10% goes into your high yield savings, and the other 10% into an emergency fund or retirement savings. That way the remaining 80% is deposited into your checking for those needs and wants, removing the requirement to "save" because out of sight out of mind, you have done this automatically each payroll.
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