“Make healthy choices to spend less and save more to create wealth, while developing wisdom”
I can be healthy, rich, and rich – oops, I mean wise; oh, that’s drugs! Hmmmm, where can I go to get all three? Well, to be healthier, I can eat less in restaurants and cook more. Wisdom can come with life experiences, but what about wealth? I don’t know what wealth means? Isn’t wealth for rich whites?
Wealth for me is spending my money on a nice crib, cute clothes and good restaurants. Well what is my net worth? Do you mean what I’m worth? The Michael Kors bag cost $ 300, my Gucci slides $ 400, my hair $ 600, my manicure and pedicure $ 150, plus my Fashion Nova dress. I’M WORTH OVER $ 1,000, ISN’T IT?
A thousand dollars of material wealth? Gurl Goodbye. Material wealth is not your net worth. Material wealth is made up of things like cars, clothes, shoes, furniture, and technological devices – THINGS we can see among our neighbors, friends, family, and ourselves. Once the money is spent on material things, that money is gone and the item may be worthless or much less. These items generally do not increase in value over time.
Once the money is spent on material things, that money is gone and the item may be worthless or much less.
Equity is everything you own (assets) minus everything you owe (liabilities). Your assets include your home, checking and savings accounts, 401K, mutual funds, cash value of life insurance policies, and cash. Your liabilities and expenses include your mortgage, rent, utilities, auto loans, credit card balances, payday loans, medical and dental expenses, technology expenses, child care expenses, and expenses. student loan repayments.
To start building wealth, we need to understand what we own and what we need. We can start with an expense journal to record everything we spend our money on.
Now, let’s take the time to answer the 3W and 1H.
How? ‘Or’ What are we spending our money?
What are we spending our money?
Or are we spending our money?
Why are we spending our money?
Start making smart changes to your spending, and over time you may be able to switch Young, Black, and Broke to Young, black and rich.
Ms. Whatley has been a financial writer and educator for over seven years and has been a DFree trainer and coordinator for several DMV financial cohorts.