He’ll Spend A Lot On The “Little” Things: Bottle service in the club for his crew and yours. Three course meals and tickets to the hottest concerts. Weekend vacays just because…it seems too good to be true because it just may be! Unless your dude is an investment banker, a successful lawyer, owner of a flourishing biz or some other big earner, it’s very possible that he’s burning a hole in his credit cards to impress you, to keep up an aspirational lifestyle or because he just doesn’t have much common sense. If what he seems to earn doesn’t match up with what he’s spending on a regular basis, your honey dip may have a little problem with managing his funds.

Read more at Madame Noire …

(Image: Thinkstock)

Maybe your beau is struggling to find a job in this terrible economy. Or perhaps he’s on a fixed income due to graduate school or helping out family members or some sort of bad investment. Either way…he’s broke. Can you handle it? If you truly care about him, not just about being wined and dined, then a period of financial struggle shouldn’t be a death knell to your relationship.

Now, if you two pay bills together or share an apartment, that’s gonna be a bit more complicated. But if both parties are committed, communicative and responsible, you can make it work. Check out our tips for dating a man who’s down on his luck.

Be Supportive, Not Motherly: Your honey’s probably feeling bad about his lack of dough and maybe even a bit embarrassed. Don’t make it worse by constantly bringing it up, even if you’re trying to be encouraging. Don’t put all his financial burdens on your back either, unless you’ve been together long enough to justify such AND can rightly say he would do the same for you. You may casually mention gig or job opportunities and forward over emails that have positions that he may be looking for, but don’t turn into his mom.

Read more at Madame Noire …

It’s all over the news, on evangelists’ posters, and in water cooler discussions across the nation: the end of the world. It is predicted to happen Saturday, May 21, 2011 by multimillionaire radio evangelist Harold Camping. Some–arguably in a minority–are fathoming the thought, preparing for their “last day,” while many are carrying on with their everyday routines, taking in the info as folklore or hearsay.

This isn’t the first time the world was predicted to “end,” from Monks’ predicting the end of times back in the 1200s to Camping’s 1994 prediction, a day that came and went like the Jheri Curl. Though, tomorrow may not be the end for all of us–considering the track record of accuracy in past predictions–two things have been unavoidable since the beginning of time: growing old and dying.

Prepare today to get your financial house in order, so that in the very likely case that a major life-changing moment occurs, your family and those left to carry on your legacy are well taken care of. Here’s a checklist to help get you started so you can make sure you’re prepared…in the end:

CREATE A LIVING WILL. You don’t have to be wealthy to need or draft a will. Experts say that without it, when a person dies, no one can handle important loose ends, such as accessing funds in the deceased person’s solely owned bank account, transferring ownership of their vehicles or houses, or collecting stock or liquid assets.

Start by taking an inventory of any assets, including investments, retirement savings, insurance policies, and real estate or other business interests. This is also where you’d choose a power of attorney, beneficiaries, and an executor or personal representative who would be responsible for taking care of filing the will in court and overseeing the probate process. Be sure to review the will periodically and make adjustments based on any life changes such as marriage, increase in assets/income or birth of a child.

BE SURE YOU HAVE THE PROPER INSURANCES AND COVERAGE. You want to have the right type and amount of insurance to cover any funeral expenses, along with other living expenses for your family and loved ones in your absence. Be sure to review your policies periodically so that you know you have the right types of insurances upon changes in your life such as child birth and marriage.

GET YOUR CREDIT AND DEBT IN ORDER. Order your credit report free from sites like AnnualCreditReport.com or see whether you qualify to get a free report any time of the year. Be sure all information is accurate and begin steps to resolve any debts you may have. Also, pay close attention to your taxes and prepare early for filing. Make sure you know your net worth and where you could improve or expand. Not only does this help you financially in the long run, but improving your credit can mean lightening the financial burden for a spouse or loved one who might be held responsible for the debt, depending on the state laws and circumstances.

BE SURE YOU HAVE THE PROPER FINANCIAL DOCUMENTS IN A SAFE PLACE. Your will and other documents in reference to financial accounts and matters should be accurate, properly signed, and in a safe place where a responsible, trusted person knows where to locate them in the case of your death.

For more on estate planning and getting your financial house in order, check out:

Life After Death: Financial Fitness Contest Winner

The High Cost of Death: Proper Estate Planning

To Save and Protect: Answers to Taxes and Estate Planning Questions

Stanley "MC Hammer" Burrell (Image: File)

He had hits from the late ’80s to the ’90s, from “U Can’t Touch This” to “2 Legit 2 Quit,” setting records as the first hip-hop artist to hit diamond-selling (10 million units sold) status. He created a multimillion-dollar brand, from those infamous Hammer pants and dance moves to TV shows, a record-label executive post and a Christian ministry. He’s been in the news for his financial missteps, from dealing with bankruptcy to recent tax woes. And through it all, there were moments where Stanley “MC Hammer” Burrell thrived and others where he had to survive. Now, he has taken his business and his brand into new arenas by learning to diversify.

Most recently, Hammer has reinvented himself as a social networking mogul. With an audience of millions (more than 2 million on Twitter alone) and a passion for the possibilities of social media platforms, he is often tapped to share his wisdom at prestigious universities such as Oxford, Stanford and Wharton. Calling social media a “tool of empowerment,” he believes in the power of its influence and the importance of being able to mold and control the message you want to send to the world, whether it’s political, social, or about one’s business. “People are able to mobilize, communicate and get the message out,” says Hammer, who is slated to be a speaker at this year’s Black Enterprise Entrepreneurs Conference May 22-25. “And local governments can no longer control the messaging. As long as you can control the messaging, you can create a perception of what life is, or even of who a person is, with social media.”

In 2008, the Oakland, California, native found a way to combine social media, dance and music via DanceJam, an exclusive Web community where one can watch, learn, and highlight their talents among others in the industry. “It was the culmination of some particular thoughts I had over the years in watching the social Web start to develop, in particular video-on-demand on sites such as YouTube,” he says. “I had an idea of a concept of how I’d like to see that on the Web, and that’s how DanceJam was created.”

Further adding to his portfolio, Hammer founded a mixed martial arts company, Alchemist Management, in 2010, tapping into a passion for the sports business that began when he worked as a youngster in the front office of the Oakland As. “I’ve always seen the energy around sports, and sports fans are a tremendous opportunity from a business standpoint.” With Alchemist, Hammer is able to manage, market, promote, and brand-build for fighters.

As an award-winning music industry veteran, Hammer has learned a thing or three about resilience and persistence, especially when it comes to finances. Infamously known for amassing millions and then having to file for bankruptcy in 1996–and reportedly having recent problems with the IRS – Hammer attests to relying on solid business principles and forward movement to stay in the game. What got him through? “Faith first, and then a true understanding of business second,” he says. “There was never a stopping point. The creation of new ideas and new businesses was a continuous process.” Throughout his career, with the building of relationships, getting into new ventures and using the skills he learned throughout his career to amass a multimillion-dollar fortune, he was able to keep the momentum going, he adds.

So what’s next for Hammer? With music always being part of what he does, he says fans can look for more Web-related projects, including a one based around utilizing the total potential of social media and social Web. He’s also continuing growing Alchemist Management, having recently signed two new fighters to the roster.

Want to hear MC Hammer share more of his business and social media insights? Meet us in Atlanta at Black Enterprise’s Entrepreneurs Conference May 22-25, 2011. Visit blackenterprise.com/ec for more details. As an incentive BE is offering you a discount on early registration: Just enter code BEDG295 and receive $200 off.

Racial wealth gap could have adverse effect on black children (Image: Shutterstock)

A white acquaintance who grew up wealthy in the South in the 1940s had the family gardener’s son, an African-American boy, as his earliest best friend. He remembers vividly what happened when he asked his mother if his friend could join them for lunch. She put the black child at a table in the kitchen away from the dining room where the family was eating and told her son never to invite his friend again. As they grew up, the possibilities and destinies for the two boys became more and more divergent, their friendship and their lives forced apart by laws and norms of the time that enforced racial separation.

We’ve come a long way as a country since then. But when it comes to wealth, there is still a massive separation between white American families and those of color, and that gap has real-life consequences for our nation’s children — and, increasingly, for the future of America.

Read more at The Root …

We’re not taking these tough times lightly. Unemployment, falling home values, and volatile share prices have fueled a lack of consumer confidence. But, while some workers have delayed retirement in response to the economic slowdown, others have discovered unique opportunities to pursue their creative interests, fine-tune their businesses, or re-evaluate how they manage their finances. The economic events of the last three years have shown us how critical financial education is for consumers and communities. As always, BE remains committed to helping you develop sound money management skills for you and for generations to come.

Laquita Blockson
As a business professor, Laquita Blockson, Ph.D. is no financial novice. But she admits there’s a big difference between knowing about money and applying that knowledge to your personal finances. Since participating in our contest last year, Blockson has created a regular regimen to help reduce her student loan and consumer debt. “I reduced all of my debt obligations to the minimum except for the highest interest rate credit card so that I could pay down the debt on that high interest debt quicker,” says Blockson.

She started contributing $1,000 a month on the high interest card versus the $750 she was previously paying. Her balance of $32,000 has been reduced to $20,000 in just 15 months. “At this rate, I should have this credit card balance eliminated by June 2012, if not sooner,” says Blockson.

In addition to reducing her overall debt, Blockson is also up for tenure in the School of Business and Economics at the College of Charleston in South Carolina. If Blockson gets tenure, she plans to further develop her consulting business, which would generate additional income. For now, her focus is on remaining marketable for tenure, which will provide her with job security.

“I had to make the choice and [accept] the tradeoff,” says Blockson. “It was important for me to spend my time trying to increase the number of journal publications that I have so that I can get tenure and promotion.”

Blockson continues to deduct her professional non-reimbursed expenses as she has since becoming a professor in 2000, including costs from consulting work and fulfilling speaking engagements through her consulting firm, Blockson Management Advising. However, she says that the challenge most professors experience in deducting professional expenses is that it is difficult to meet the required minimum deduction threshold (more than 2% of adjusted gross income (AGI)). So although the amount that she deducts is relatively small, it does reduce her tax obligation.

Blockson put half of her $2,000 winnings toward her debt, and used the other half to open up a Roth IRA.

BE’s 2009 Advice: Aggressively reduce debt. She should manage her debt by consistently paying more than the minimum, on time, each month.

How she responded: Blockson has been steadily chipping away at the more than $30,000 she owes on her credit cards with the high interest rates. By reducing the amount to the monthly minimums she was paying toward her school loans and low-interest/low balance credit cards, she has been able to apply the difference to the high interest credit card balance. In just 15 months she has paid down $12,000 of her debt.

BE’s 2009 Advice: Blockson can deduct research spending, and should hire a tax professional who is familiar with academic expenses.

How she responded: This is a practice that Blockson has always been aware of and continues to do during tax time. Although it’s difficult to meet the 2% AGI deduction threshold to see any true dollar savings, Blockson does reap the benefits of reducing her tax obligation.

BE’s 2009 Advice: Leverage skills to generate additional income. Although she has started her own consulting company, Blockson has been hesitant to promote her business for fear that it would jeopardize her chances to be awarded tenure.

How she responded: Blockson is currently under tenure and promotion review and will receive notification by mid-March 2011. If she’s granted tenure, she’ll have job security and will then work on taking on more clients. Until then, she’ll continue providing her consulting services to ongoing clients, but will spend the majority of her time investing in scholarly activities.  “It serves as my career currency which will help me to maintain my academic marketability,” says
Blockson.

Jason & Carol Wooden
Since we last spoke with the Woodens 14 months ago, they have made great strides in expanding their business and protecting their assets. In June 2010 they opened the JC Bartending Academy in Plano, Texas. The school offers hands-on bartender training, certification from the Texas Alcoholic Beverage Commission, and job placement assistance. To date, 85 students have graduated from the program.

“Despite the hard economic times, we have been able to train a skilled workforce and create job opportunities for all of our graduates,” says Carol, 31, who has a 15-year goal to leave her 9-to-5 and join her husband to run the bartending academy. Although the couple’s original plan was to be their own bosses in 15 years, Jason, 31, left his job as a high school guidance counselor to oversee the bartending business and school full-time as of June.

Shortly after winning the contest the couple had their first son, Jason, in July. Jason admits that having a child on the way was the “big eye opener” that made them realize it was time to get their finances in order. “We knew we had to do it but never took the time to initiate it. We needed to stop putting things off and get it done.”

The couple met with an attorney and developed a will and an estate plan to ensure that their wealth is distributed appropriately in the case of divorce or death. They also secured variable universal whole life insurance and secured general liability insurance for their business to protect their personal assets. As far as insurance policies they decided that two $500,000 policies would be enough to cover their expenses at the time of death. The Woodens also created a regular savings plan using an already established Roth IRA as their son’s backup college savings plan. So far they have saved $4,500.

The couple applied the $2,000 contest award to an interest bearing ING savings account.

BE’s 2009 Advice: Jason and Carol want to semi-retire in the next 15 years. However, it would be more realistic for them to delay retirement, while increasing their contributions to their employer’s plans to the maximum amount. The $2,000 contest winnings should be used to build up Jason’s retirement fund.

How they responded: The Woodens still want to be their own boss  by age 45. Instead of increasing their retirement contributions, they temporarily decreased them and used the funds to open their bartending school.

BE’s 2009 Advice: The couple should hire an attorney to draft trust and wills so that their wealth can be distributed appropriately in the case of divorce, or if one or both of them should die. They should name guardians for their child in their will. They should also retitle their rental properties into a trust in order to protect those assets.

How they responded: The couple put a will and estate plan in place to protect their business, son’s future, and their rental properties.

BE’s 2009 Advice: Purchase an umbrella liability insurance policy and additional business insurance to protect their assets.

How they responded: Carol purchased long-term disability insurance through her employer and Ameriprise Financial. They decided to obtain two life insurance policies worth $500,000 in coverage each versus the $4 million to $5 million that was suggested.

BE’s 2009 Advice: Open a 529 savings plan and start saving for their child’s education.

How they responded: After doing some research the Woodens felt that the 529 plan had a lot of restrictions that they didn’t want to get locked into. “You can only use the money toward college and if our son decided not to go to college we would have to pay additional fees to withdraw it,” explains Carol. For now, they decided to contribute to their Roth IRA.

Tyvi Small
When BE reviewed Tyvi Small’s financial picture more than a year ago, it was clear he was becoming a good saver, having recently started to put away 10% to 15% of his take-home pay. Still, he admitted, he needed to improve his discipline.

His top priority was identifying cuts in his personal spending. “I had to critically assess what was a need and what was a want,” admits Small who is diversity coordinator at the College of Business at the University of Tennessee. He cancelled his social club membership, which he says he rarely used. He also realized that he was spending $350 a month on meals.

To cut down on the cost of eating out, Small teamed up with his girlfriend, who he calls “the queen of the crock pot,” and developed a menu for the week. They have also made a habit of going grocery shopping together, reviewing store circulars, and using coupons for their purchases. Small says he also targeted grocery stores that offer lower prices and allow him to buy his food in bulk rather than just going to the closest store out of convenience. Small’s newly acquired taste for bargains and home-cooking have helped him realize a monthly savings of $200.

Small has also been able to increase his emergency cash reserves and says that he is months away from achieving his goal of eight-month’s worth of emergency funds.

In our review of Small’s retirement portfolio, we felt he was a bit too aggressive, holding 100% in stocks. To fully participate in the market, Small diversified and reallocated some of the eggs in all three of his retirement accounts.

“I didn’t even know prior to the contest that I needed to pay attention to all of this,” admits Small. After sitting down with the financial planner he was able to make note of how much he had in each account, the differences in accounts, and gained full understanding of his employer matching program.

“Talking to a professional laid it out for me in a way that I could understand and digest it,” says Small. “It gave me good direction in how to become more financially secure.”

BE’s 2009 Advice: Develop a budget and cut out the extras.

How he responded: Small calculated his monthly income and made a list of his monthly expenses. Putting pen to paper showed him that he had been budgeting for items that he didn’t really need. Small now prepares his own meals with the help of his girlfriend and does his grocery shopping in bulk. Although he has not cut out his lawn services, he has cancelled his social club membership ($71 a month)

BE’s 2009 Advice: Increase savings. Small has about three months worth of living expenses saved. Considering the economy and his responsibilities as a homeowner, he should have at least six to eight months saved. He should use the $2,000 contest winnings to build this account.

How he responded: After cutting out some of his expense, Small has been able to increase his saving to 20%, which he automatically deducts every pay period into his mutual fund, and currently has six months in emergency savings.

BE’s 2009 Advice: Diversify retirement portfolio. Small is investing 100% in stocks in both his retirement accounts. Small should diversify and include a percentage of fixed-income investments in his portfolio.

How he responded: Small continues to contribute the same amount to each account ($50 a month into his 401(k); $150 a month into his 403(b). He plans to increase his investment to $600 a month after he reaches his emergency savings goal of eight months. He now invests 70% in stocks and 30% in bonds to protect himself from market fluctuations.

BE’s 2009 Advice: Obtain long-term care insurance to provide assistance in the event of a catastrophic illness or an event where extended care is need.

How he responded: Small decided not to get long-term care insurance. After research and reviewing quotes, which were estimated at about $100 a month, Small decided instead to use the $100 to open a high-yield mutual fund. BE

When it comes to finances, honest communication early in the relationship is key.

A recent Atlanta Post article, Six Reasons He Won’t Marry You … Financially, on love and money provoked lots of comments from offended readers and sparked debate among the Black Enterprise editors about the importance of financial compatibility in a relationship.

The premise of the article is relevant and engaging: Yes, finances play a major role in a couple’s compatibility and relationship success, especially when it comes to marriage.  But, in error, the author leads one to believe that someone–particularly women–should be financially fit just so a man will want to marry them, and that the burden of proving financial “fine-ness” lies solely on the woman.

Here’s one excerpt I read with a raised eyebrow:

… Five years later, you’re still here and unmarried.  You’re [sic] good woman.  You’d make a great wife…What’s wrong? It’s You. Often, the most beautiful and intelligent women miss the aisle because they lack financial ‘fine-ness’…Often, the commitment you seek is farther than the road you’re blocking from his financial freedom.

(Blocking a man from his road to financial freedom? Are you serious? Brother, give me a break.)

Building wealth and managing money is something you and your potential partner must do together. This writer’s take on the subject is very reactive, singular, and self-centered when it should be advocating proactivity, teamwork,  and compromise.

Take this notion:

“… In order to survive and be successful, our self-confidence must always remain in tact… We’ll push you away if you make us feel smaller than our vision of ourselves. …  Succeed; but never flaunt your financial prowess.”

(So, not only are women supposed to pat a mate on the back whether they’re successful or had a setback; we must also downplay our own successes or else get the boot?)

Let’s look at our priorities here. How about focusing on empowering ourselves, whether male or female, to build financially fit lifestyles, thus making it easier for us to focus on things that should complement–not supplement–one’s life, such as marriage?

On Blackenterprise.com, we regularly feature stories about relationships and money management (See Love & Money), and the common thread is this: two people working together toward a common goal with open and honest communication. If a person is in a serious relationship and has not talked about their financial history, spending habits, and outlook on money from the start– that’s the real problem.

Though healthy money management can contribute to relationship success (that is, if success to some, means marriage), it is only part of the full picture. A mate’s compatibility and so-called “worth” is far more than contributing to someone’s bottom line.

Let’s rethink our priorities and motives for the way in which we live, and stop using insulting finger-pointing and stereotypical assumptions. Let’s take the strategic steps in striving to improve and build a clear path toward wealth for life, thus leading to fulfillment in any partnership, whether it’s in career, entrepreneurship, business, or love.

Money expert Michelle Singletary challenges consumers to give up credit and debit cards for 21 days to cut spending.

Author and Washington Post columnist Michelle Singletary offers a take on financial fasting that might have some raising an eyebrow. Mention the idea of not using a credit card and some will say, “That’s doable.” But asking someone not to use plastic at all, including debit cards, might have them shaking their head in strong defiance.

In her latest book, The Power to Prosper, 21 Days to Financial Freedom (Zondervan; $14.95), Singletary poses just that challenge:  For 21 days, put away those cards and buy only what you need to live. Singletary talked with BlackEnterprise.com about how to approach such a challenge:

• First, limit what you buy. Only purchase necessities such as food and medicine. Extras, such as a new pair of shoes, tech gadget, or a visit to your favorite nail shop for a pedicure/manicure are out of the question. And if you can afford to do without things such as a cell phone, cut that out as well.

• Take your credit and debit cards out of your wallet. It will limit the possibility that you will spend without thought, Singletary says. For example, you intend to buy one thing at the grocery store and you come out with a cart full of groceries, even if you have food at home.  “It’s often because we can pay for it with plastic, including debit cards,” Singletary says. And don’t believe the myth that not using your credit card will damage your credit standing. “Refraining from using your credit card [for a period of time] will not hurt your credit. The biggest impact is not paying on time,” she says.

• Change how you spend your time. Alter routines that might tempt you to spend unnecessarily. For example, if you pass your favorite store on your way to work every day, change your route.

• Get an accountability partner you can trust. Find someone who can support and encourage you not to buy something. “It’s like having a workout partner,” Singletary says.  Whenever you feel the itch to buy something that is not necessary for your survival, call your accountability partner.

The 10 Wealth for Life principles are meant to serve as a step-by-step guide to responsible saving, investing, and spending in order to build wealth and pass it on to future generations. Wealth preservation goes hand-in-hand with wealth accumulation. Consequently, the new principles place greater emphasis on financial discipline. Through consistent application of these principles, you and your family will be well on your way to establishing a financial legacy that will survive the test of time. We resolve to give you the tools you need to not just survive, but thrive, regardless of what the economy and financial markets look like.

Our Wealth For Life Principles

1. I Will Live Within My Means
2. I Will Maximize My Income Potential Through Education and Training
3. I Will Effectively Manage My Budget, Credit, Debt, and Tax Obligations
4. I Will Save At Least 10% of My Income
5. I Will Use Homeownership as a Foundation For Building Wealth
6. I Will Devise An Investment Plan For My Retirement Needs And Childrens’ Education
7. I Will Ensure That My Entire Family Adheres To Sensible Money Management Principles
8. I Will Support the Creation and Growth of Minority-Owned Businesses
9. I Will Guarantee My Wealth Is Passed On To Future Generations Through Proper Insurance And Estate Planning
10. I Will Strengthen My Community Through Philanthropy

Emerging from a brutal recession, large numbers of Americans – like our survey respondents – have a laser-beam focus on debt reduction and savings as a means of improving their financial position. On Tuesday, the Federal Reserve Bank of New York reported that total consumer debt dropped 6.5% over the past six quarters from a record high in September 2008. Moreover, household delinquency fell to 11.4% of outstanding debt in the second quarter of 2010, the first time since early 2006. And at the beginning of this month, the Commerce Department revealed that the personal savings rate for Americans was 6.4% of post-tax income – the highest rate since June 2009. Prior to the Great Recession of 2008, the rate had reached its lowest level since 1933, at the height of the Great Depression.

In talking with Editorial Director John Simons, Black Enterprise’s guru of all matters related to personal finance, he shared that more and more individuals have adopted a new, debt-conscious frugality. In fact, he pointed to the 2010 Ariel Investment survey of African American investors that found that 80% of African Americans surveyed cut back on spending and 83% are not delinquent on any home, auto or credit card payments.

These positive developments don’t mean that thousands will not continue to be bedeviled by the aftermath of the severe economic downturn. The New York Fed also reported that despite the decline in delinquency rates, bankruptcy notations on credit reports rose by 34% in the second quarter. And households in states with the highest home foreclosure rates – Arizona, California, Florida and Nevada, among others – continue to struggle.

That’s why adopting the Black Enterprise Wealth for Life Principles has become so vital now more than ever. Take Andre and Yohance Jackson, a couple featured in our September issue. The Washington, D.C. couple has make sure they only need one salary to pay mortgage and household expenses; review auto and life insurance policies to find policy discounts; use cash for most purchases and, above all else, make regular savings a priority. The Jacksons offer strong example for our survey respondents – and others- to follow.

Derek T. Dingle is the editor-in-chief of Black Enterprise magazine.