What every sister should know about managing her money - Money Talk$ - Brief Article

Ebony, March, 2002

SISTER, you may not realize it, but financial stability really is possible in this world of uncertainties. However, it won't come from dollars falling from the sky or by way of Prince Charming sweeping you off your feet. Financial stability can come from your own paycheck --but only if you manage your money properly.

"It's important that we use the money that we have as wisely as is possible," says Glinda Bridgforth, a financial counselor and founder of Bridgforth Management Group, based in Detroit and Oakland, Calif. "We need to give attention to our finances on a regular basis. If we give attention to our finances, that will be a huge step toward getting financial stability and financial security."

Seek Information On Finances

The amount of information that can be obtained from reading books, attending workshops and consulting with professionals is endless. But you'll likely have to reflect on your financial situation and to divulge a few details to get the best help available. However, some Black women feel uncomfortable discussing money with others due to a variety of factors.

A tradition of distrust plays a major role in preventing conversations about finances, as many Blacks may believe seam artists will take advantage of them. Others fear that, based on their financial health, some people may perceive and react to them differently.

"They're either embarrassed or they don't want other people to know what they have," says Stephanie Hancock, a certified financial planner at LPL Financial Services in Santa Monica, Calif. "So if you don't have anything, you don't want people to know, and if you've got something, you don't want people to know because sometimes people want to borrow it."

Black women should become less apprehensive about and more proactive in learning how to manage their finances. Bridgforth, author of Girl, Get Your Money Straight, sees a positive sign in this direction when she hosts workshops and seminars that are jam-packed with women thirsting for information on managing their money. Being excited and receptive to information presented in workshops and even in books can do a lot to boost your overall knowledge of money.

Avoid "Retail Therapy"

Sisters and style go hand in hand. However, keeping your style in pace with your wallet is a different matter.

At times, women may go on a shopping binge for clothes, shoes, etc., to feel better about themselves. Although the feeling may be good at first, it doesn't feel the same when the bill comes. Therefore, it is important to avoid this pitfall as a means to boost your spirit when the chips are down so that your finances aren't altered.

"When we look at our motives behind some of the spending, we can analyze it and say, `Is this the right move to make?'" Bridgforth says. "If the motives are emotionally based, you can see why it is important to address the issue, as opposed to spending the money trying to medicate ourselves over something that no matter how much money we spend, it's never going to change the problem. It's important to deal with the problem directly."

Maintain Financial Security

Emergencies are, inevitably, bound to happen to everyone. How well you're prepared for financial calamities can mean the difference between a small setback and a complete disaster. All women should have a special account for emergency expenses so that they won't fall into the web of debt. "When [women] do need money, like when their car's tires are flat, when they need the [insurance] deductible, or when they lose their job, or all of these different things, they turn to credit cards or borrow money from somebody," Hancock says. "They should plan for these things before they happen."

Women not only need a "rainy day" fund, but also should be prepared for major storms that life may bring. Therefore, life and disability insurance should be included in every woman's budget.

"Long-term disability insurance is really important," Hancock says. "The odds are that you're more likely to become disabled than to die."

Even with all of those bases covered, it is still important to plan for the worst-case scenarios. Sudden changes, such as divorce or a death in the family, can leave a Sister financially unprepared to move on. Put your future in your own hands, not someone else's.

"Always have your own money, even when you get married," Hancock says. "You always have to be conscious of protecting yourself. Don't let someone else mess up your credit and your funds."

Take Control Of Your Financial Future

Bridgforth and Hancock both say they often encounter clients who have a good income, yet their finances resemble a train wreck. The clients have no idea how the money is being spent.

The most important source for getting more money actually comes from using the money we have more wisely, Bridgforth says. It all starts with the individual.

Managing money is not rocket science. Still, it requires dedication, patience and discipline. Every dollar managed properly has the potential value of something even greater.