Tiffany M. Fletcher of Philadelphia likes the good life. Raising her two grandchildren Zaikeyah, 17, and Komayah, 4, she spends at least $400 per month eating out with them at Applebee’s, Houlihan’s, and other area restaurants. She loves to shop for them and herself, buying the latest designer fashions and the hottest new CDs and albums. Having an annual income of more than $70,000 as co-owner of D&T Auto Body Shop, she should be able to indulge herself. But at 55, Fletcher has a newly opened savings account, is in credit card debt, and although she is near retirement age, she has no retirement fund.
“I am embarrassed to say that I don’t save money,” Fletcher confesses. “I’m always helping out family members. I stay on the go and don’t have time to cook. Therefore, I eat out a great deal. The girls [also] like to have the latest clothes. There’s always impulse buying. I just don’t know where my money goes. I would just like to try to figure out a way to save money, get out of credit card debt, and invest in our future. With the economy as it is, I could be out of work and down to zero tomorrow. When you are self-employed, nothing is guaranteed. I need some savings to fall back on.”
According to the 2001 Retirement Confidence Survey, Fletcher is one of the 31% of African American workers who have nothing saved toward retirement, versus 19% of all American workers. We spoke with several experts who gave us 10 commonsense, money-saving tips for the new year. Like Fletcher, you, too, can make tightening your financial belt a New Year’s resolution during this time of recession, layoffs, and downsizing, so that you’ll have a sizable nest egg saved up to cushion any financial hardships.
Don Blandin, president of the American Savings Education Council (ASEC), states consumers should immediately: 1. write down their financial goals and commit to saving regularly; 2. pay down their debts; 3. set aside an emergency fund; and 4. do a retirement savings calculation. Consumers can figure out how much to save by using ASEC’s Ballpark Estimate worksheet at www.asec.org or www.chooseto save.org, or get a copy of Black Enterprise’s Wealth Building Kit by calling 877-WEALTHY or the Black Enterprise Wealth Building Journal (John Wiley, $19.95) for guidance.
Consumer expert Clark Howard, host of The Clark Howard Show (www.clarkhoward.com), a nationally syndicated radio program, says the majority of people have no idea where their money goes. He offers this advice for consumers who are starting to save: “For two weeks, I would like for you to walk around with a little spiral notebook that will fit in your pocket or purse. Write down every expense–large and small. After two weeks, sit down with your spending list and grade each expense A through F. [Items with an A grade are things that you "absolutely" need, and items with an F grade are things that you "absolutely don't" need.] Those that get a D or