By Taylor Morgan | Special for the observer
(OPINION) – What is financial freedom? Generally, this means having the ability to buy what you need, being prepared for emergencies, having access to credit and using it wisely. Apparently, achieving financial freedom should be as simple as having a decent job and money in the bank.
But for many black people, financial freedom is either a distant dream or unattainable because of the discriminatory policies that have been put in place over the past two centuries – from slavery and redlining to school segregation and Jim Crow – these policies have created a systemic inequality that has been difficult to overcome.
In addition to these institutional barriers, working-class families did not always have a way to learn about budgeting, using credit, or saving for the long term in underfunded, segregated schools of fact. Even today, financial literacy is not required in the California curriculum. Under these conditions, many black Americans are falling miles behind in a financial race to a finish line obscured by obstacles put in place generations ago. The Federal Reserve reported last year that the average black household still earns only about half the amount of the average white household and owns only about 15-20% in net worth.
A self-guided education
As one of five children born to a young single mother living on government assistance in an urban neighborhood, there was not much hope in my family that we would ever end the cycle of poverty. Growing up, we were conditioned for survival, not financial enrichment. I was the first in my family to go to college, where I supported myself through financial aid and student loans. I didn’t realize I lacked financial knowledge until I tried to buy my first new car. My 1996 Geo Prizm’s engine blew and I didn’t have the funds to get the car fixed and my credit score was in the 500s. I was stuck and felt like a prisoner of my own finances with no idea how get myself out of it. It was then that I made a conscious decision to take control of my finances and push to be financially free.
Once I decided to break the cycle, I started my self-guided financial education. I created a plan to save my first $1,000. Once achieved, I set a goal to save another $500 to get a secured credit card to rebuild my credit. I spent two years paying off my debts, saving and rebuilding my credit. I was finally able to buy this new car! As I was promoted at work, I set up automatic payments on my savings account which is now well funded to cover an emergency. I boosted my credit score into the 700s and was able to buy my first home, on my own, before I turned 30.
Where to find the tools and resources to become financially free?
1. In schools. Research shows that personal financial education can help students avoid payday loans in the future, build credit, and reduce personal debt. And schools are finally taking notice. Michigan just became the 14th state to require high school students to take a personal finance course before graduating. California offers similar classes, but without a mandate, and studies have shown that this education, to be effective, should begin as early as elementary school.
2. In the community. Nonprofits and credit unions have long filled the void to bring financial education to underserved communities. SAFE has many great products that have helped me
my journey to financial freedom plus free financial wellness seminars that provide helpful information on all the topics we may have missed growing up: budgeting, credit, buying a home, and planning for retirement . There’s no shame in starting wherever you are right now – I didn’t know what a debit card was until I was 19!
3. At home. Financial literacy should be rooted in our family history, culture, and values, but we’ve been stymied by policies that many are still trying to overcome. But our story is not over. Sharing information is free, but it is an invaluable tool we can provide to the black community. I hope you will feel inspired by my story and decide to practice these lessons at home with your family. Talking about money is not easy for most of us. But for change to happen, we have to be the change in the community that we all want to see.
Although I still don’t believe I have achieved ultimate financial freedom or achieved all of my personal financial goals, I can share the lessons I have learned in my own life about financial wellness with anyone who will listen. Many of us have unlocked new levels of financial freedom, and if you’re like me, a first in your family to get there, we have a social responsibility to pay it back to our parents, as well as forward to the next generation.