By Taylor Morgan | Special to The Observer
(OPINION) – What is financial freedom? Generally, it means having the ability to buy what you need, being prepared for emergencies, and having access to credit and using it wisely. Seemingly, achieving financial freedom should be as simple as having a decent job and money in the bank.
But for many Black individuals, financial freedom is either a distant dream or unattainable due to discriminatory policies that were put into place over the last two centuries—from slavery and redlining to school segregation and Jim Crow—these policies created systemic inequality that has been difficult to overcome.
On top of these institutional barriers, working-class families didn’t always have a way to learn about budgeting, credit use, or long-term savings in underfunded and defacto-segregated schools. Even today, financial literacy is not required in California’s education curriculum. Under these conditions, many Black Americans are starting miles behind in a financial race to a finish line obscured by hurdles put into place generations ago. The Federal Reserve reported last year the average Black household still only earns about half as much as the average White household and own only about 15 to 20 percent as much net wealth.
A Self-Guided Education
Being one of five children born to a young single mother living on government assistance in an urban neighborhood, there wasn’t a lot of hope in my family we’d ever end the cycle of poverty. Growing up we were conditioned for survival, not financial enrichment. I was the first in my family to go to college, where I supported myself with financial aid and student loans. I didn’t realize I lacked financial knowledge until I tried to buy my first new car. The engine in my 1996 Geo Prizm blew out and I didn’t have the funds to have the car repaired and my credit score was in the 500s. I was stuck and felt like a prisoner to my own finances with no idea how to get out. It was at that moment I made the conscious decision to take control of my finances and push to be financially free.
Once I set my intention to break the cycle, I began my self-guided financial education. I created a plan to save my first $1,000. Once achieved, I set a goal to save another $500 to obtain a secured credit card to rebuild my credit. I spent two years paying off debt, saving, and rebuilding credit. I finally was able to purchase that new car! As I got promoted at work, I set automatic payments to my savings account that is now well-funded to cover an emergency. I increased my credit score into the 700s and was able to purchase my first home, by myself, before I turned 30.
Where can the tools and resources to becoming financially free be found?
1. In schools. Research shows that personal financial education can help students avoid payday loans in the future, build credit, and reduce personal debt. And schools are finally taking notice. Michigan just became the 14th state to mandate high school students take a personal finance course before they graduate. California offers similar classes, but no mandate, and studies have shown this education, to be effective, should begin as early as elementary school.
2. In the community. Non-profits and credit unions have long filled the gap to bring financial education to underserved communities. SAFE offers many great products that have aided me in
my journey to financial freedom as well as free financial wellness seminars that provide useful information on all those topics we may have missed growing up: budgeting, credit, homebuying, and retirement planning. There’s no shame in starting wherever you are right now – I didn’t know what a debit card was until I was 19!
3. At home. Financial literacy should be engrained in our family history, culture, and values but we were stymied due to policies many are still trying to overcome. But our story is not over. Sharing information is free—yet it is an invaluable tool we can provide to the Black community. I hope you feel inspired by my story and decide to practice these lessons at home with your family. Talking about money doesn’t come easily for most of us. But for change to occur, we must be the change in the community we all want to see.
While I still don’t believe I’ve achieved ultimate financial freedom nor have I met all my personal finance goals, I can share the lessons I’ve learned in my own life about financial wellness with anyone who will listen. Many of us have unlocked new levels of financial freedom, and if you are like me, a first in your family to get there, we have a social responsibility to pay it backwards to our parents, as well as forward to the next generation.
Taylor Morgan is a Human Resources Coordinator at SAFE Credit Union, she can be reached at firstname.lastname@example.org.