Smith’s direct, simple writing style encourages readers to develop long-term strategies to secure their financial future in light of tough economic conditions. In his book, In the Black: Live Faithfully, Prosper Financially: The Ultimate 9-Step Plan for Financial Fitness (Amistad; $15.99), Smith takes the reader step-by-step and stresses the importance of paying yourself first, getting a handle on spending, paying down debt, and maximizing cash flow. “Putting pen to paper is the first step,” he says. It can be distressing to realize that your money may not last through retirement, but once you pinpoint the amount you’ll need you can set a goal and work toward achieving it.
Smith takes what can sometimes be an intimidating topic and makes it accessible to readers of all stripes—single parents, twentysomethings, and people nearing retirement just to name a few. He weaves client stories throughout to provide insight to problems that everyday people grapple with. Smith’s client and co-author, Brenda Lane Richardson, shared her story: Although she had always budgeted her money, paid her bills on time, tracked expenses, and saved for her children’s college tuition, she had never put aside money for herself. At the age of 50 she was learning how to pay herself first.
“I felt so ashamed. I didn’t want anyone to know that I hadn’t planned anything,” says Richardson. “I made a lot of mistakes, but I owned up to them and moved on.” She suggests making automatic deposits into a 401(k), IRA, and savings account.
Smith emphasizes the importance of paying off debt. Another tip: Start investing now. More than 70% of Smith’s clients are over the age of 50. Young people tend to put off saving and investing because of the common misconception that saving for retirement is something only “old people” do, Richardson says. But the reality is that delaying saving and investing will likely mean having to set aside twice as much to reach one’s financial goals.
“It’s not that people don’t want to save,” says Smith. “They just don’t understand the strategies that can help maximize their savings. We are conditioned to spend what we earn.”
Although tucking away a few more dollars may tighten your budget, it will help you exercise sound financial practices and live comfortably in your retirement years. “You must save until it hurts,” says Smith. “You should be saving 15% of your income and paying yourself automatically right out of your pay. Once you start saving automatically it becomes part of who you are.”
This article originally appeared in the July 2009 issue of Black Enterprise magazine.