Budgeting Basics for Black Millennials

According to centuries of white privilege, there exists a wealth gap between races. Systemic racism and income inequality lead to greater gaps between ethnic groups, making it more difficult for people of color to succeed over the long run.

Disadvantaged because they have historically had fewer jobs with consistent pay and less access to savings and investments, African Americans have been put at a disadvantage when it comes to accumulating money. This has complicated a wide range of financial planning issues for persons of color.

Ahead of the competition

Many Black millennials, however, are committed to correct the economic imbalances among racial groups and are taking initiatives to ensure their financial security in the future. A greater number of young Black individuals can save money and direct their finances because they begin to manage their finances early.

First step

It can be difficult to know where to begin, as learning is a gradual process and simple approaches are vital. According to Black financial gurus, the greatest place to start with personal finances is a budget.

What does a budget consist of?

A budget is a monetary plan, a list of how much money you are willing to spend. Before doing anything else, create, manage, and regularly alter a budget.

Because managing your money carefully is critical

• A budget enables you to plan for a lifetime of financial decisions, such as preparing for
• college or saving for retirement. 
• Because it is too simple to underestimate how much money is being spent on necessities such as bills, food, rent or mortgage, and transportation, many individuals find themselves buried in debt. 
• Accumulating all of your expenses lets you monitor your spending and identifies potential savings opportunities.
• It is possible that you could change your cell phone carrier to save a few dollars, or that you could catch the bus instead of using an Uber.
• effect the design of your project.
• See how much money you'll get and how you'll spend it (retirement planning)

The benefits of budgeting include:

A solid budget offers clear guidance on your finances and also keeps you aware of when you will pay off your obligations. It provides you with an accurate prediction on when you will once again have additional money. You will be able to save or invest whenever money becomes available. White people have had a long history of investing their money in various securities, and now it is time for people of color to do the same.

What are the first steps?

For the beginning, you can begin recording your income using an Excel spreadsheet. You're tracking income and expenses, and calculating the difference. The process is simple, just grab a sheet of paper and a pen.

You will discover that you have a surplus (money left over) or you will discover that you do not have enough money to cover your spending (a deficit). It is now the purpose to increase that excess as much as possible to maximize it. This will allow you to pay off debt faster or save for your goals with the extra money you've earned.

A step-by-step process to capture ideas on a budget

If your budget is not precise, it will be of no use. To establish a budget, you must factor in both variable expenses (such as wages, investments, side-hustles, and credit card and loan payments) and fixed expenses (rent/mortgage payments, utilities, and credit card and loan payments).

You'll need to make sure you have these things to record:

• the everyday expenses (rent, mortgage, loans, credit cards, cell phone, electricity, insurance, etc)
• outlined above" (vehicle registration, medical expenses, holidays)
• Information on the source of income (any after-tax money you have coming in) 
• saved/invested capital (including any interest earned)
• keeping your finances in order

To maintain a budget in balance, you must stay on top of it. The challenge with creating a complete budget is that many individuals put forth the effort to build it, but very few bother to keep it up to date. Use bank statements or receipts to keep track of your money and write it all down in your budget. 

Make a spending journal or use a smartphone app to track your expenditures. When it comes to financial guidance, one way to think of your budget is as a kind of financial adviser that can help you get to your goals.

Hire someone to help you

It seems overwhelming when you're asked to keep track of all those figures. If you like a client-focused approach, utilize an employee to assist. As the diversity of our financial adviser community attests, there are numerous Black financial advisors available who can provide you with personalized financial advice suited to your circumstances.

Don't rely on financial advice from everyone, you should seek guidance from certified financial services professionals instead. Black financial advisors know the various obstacles you confront as a person of color in an economy that is based on racial equality. Rather than fighting the system, be more strategic in your approach to it.