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For those who believe the days of spending with reckless abandon will return, I have news for you: Those times never really existed.
Before the Great Recession and today’s tepid recovery, so many of us felt we could buy new cars, take exotic vacations, and engage in other lavish activities at will. The reality is, we borrowed a lifestyle, financing our extravagant tastes with credit cards and home equity lines of credit. It was as if we enjoyed a long, continuous party. We forgot the lessons of our parents and grandparents and now we are forced to spend years cleaning up our financial mess. In the process, we may have handed down unrealistic expectations and a number of bad habits to our children.
We must make money management and financial education a family affair. That means going back to the basics as we repair our finances and put our kids on the right financial course. First, we all need to take a refresher course on the rudiments of sound personal finance. The lessons are quite simple but require discipline: They include living within our means, paying ourselves first by saving a portion of what we earn, creating a budget and sticking to it, and avoiding the accumulation of unmanageable debt. In fact, much of this common-sense approach to your finances can be found in our Wealth for Life principles which you can download at blackenterprise.com.
Our grandparents and parents understood the value of a buck as well as the best ways to maximize dollars. We’re only two generations removed from African Americans who had been locked out of out of mainstream society due to Jim Crow laws and discriminatory practices. As a result, they were forced to scrimp and save and pool their resources to start businesses, build institutions, purchase homes, and sock away money for their children’s future. It was their sacrifice and determination that allowed for the creation and preservation of some of our great black institutions. Our parents, many of whom were children of the Great Depression, witnessed firsthand the aftermath of financial devastation from unforeseen forces. Not only did Mom and Dad realize that they had to adhere to their parents’ rigorous financial planning, they had to protect their wealth by being prepared for the unexpected. By doing so, they created a better life for us.
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