Black Women and Spending: Controlling Your Pocketbook

Sunday, 01 November 2009 19:31 Written by  Cicely V. Teal

When we are displeased with our overall physical appearance, we make blueprints for change. We change our eating habits and exercise to lose weight. We head to the salon to get our tresses styled when we’re having a bad hair day, and we shop manically when we want to revamp our wardrobe. But what about a financial makeover? What about making plans to get out of debt and making a new start for the next year?

 

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According to Packaged Facts, a leading publisher in market research, the population of African Americans in the U.S. exceeds 38 million, which makes up approximately 12 percent of the total population. However, African Americans are the leaders in depreciable spending. Packaged Facts reported that African Americans have a buying power projected to exceed $1.1 trillion in 2012.

The “black” spending habit often stems from wanting social acceptance. The socioeconomic and psychological aspects of instant gratification have long plagued the financial sustainability of the black community. According to Target Market, a company that tracks black consumer spending, African Americans spent $22.9 billion on clothes, $3.2 billion on electronics and $11.6 billion on furniture to put into rented homes. All this in 2002, the year the economy plunged.

On top of depreciable product spending, African American women spend more money on hair and makeup than any other race. A study conducted by Essence magazine, in conjunction with Vision Critical Group, reported that African American women spend 80 percent more on cosmetics annually and nearly twice as much on skin care products than general market women do annually.

Renata Sago, a Chicago native and senior at Brown University in Providence, Rhode Island, admits to unnecessary spending habits, but she is still planning for her future. “I am a black woman, so I do spend money on my hair and clothes. If I want a certain something I will get it,” Sago says.

Sago does believe it’s the little cutbacks that can really make a difference. “I do pay attention to the price difference in the grocery store. Instead of buying a new coat, I will have my coat sent here from home. You learn, as you become independent, to budget. Money management is learned,” she explained.

The financial crisis in the community could quite possibly be generational one. It could even be tied to civil rights where blacks felt like second class citizens and when the opportunity became available to acquire what they never thought they could, it went from an open door to pure excessiveness, and the desire for material items became a cycle in the black family. Accompanied with wanting to appear physically acceptable to black men and the rest of the world, black women often view their role in the community and to their families as obligatory.  All these factors directly and indirectly affect financial planning. Black women are community leaders, and it is absolutely imperative that we become well-versed in financial literacy.

Starting with short-term financial goals now and working your way upward is a great way to enter into the New Year.

“I do have short term goals. I’m starting out weekly by taking a certain amount out every pay period for emergency money,” Sago says.

Don’t be afraid to start small. You have to crawl before you walk. Once you put yourself on a strict financial diet, it will become like second nature to you. You’ll develop the same fervor for saving as you had for spending. There are probably some resplendent and sumptuous items you feel you can’t live without, but there are always alternatives. You have to change your financial and emotional thinking.

ING Banking, a financial institution that offers financial services to clients of all classes worldwide, offers tips on how black women can get out of debt:

•    Resist impulse purchases. As much as 40 percent of black women surveyed said they shop to cheer themselves up. Financial experts suggest "being more mindful and thinking twice before making a discretionary spend can make a big difference in your wallet over time."

•    Use credit cards sparingly. Spending money you don't have in hand is never wise, regardless of economic conditions. So get into the habit of only using credit cards for purchases you've carefully considered.

•    Use an automatic savings plan. Although financially supporting family members can make saving difficult, enrolling in an automated savings account is a seamless way to be sure you're socking something away. If your company offers a retirement savings plan, that's probably the best place to start.

•    Don't be afraid to ask for help. As women increasingly become the breadwinners for their families, networking with other Black women who have similar problems can help them come up with solutions.

•    Join an investing club for women. Often, people are uncomfortable talking to finance professionals, but an investing club for women is a great way to break the ice. Check out investing clubs in your community that are compatible with your level of experience and investment knowledge.

Do what you can in the financial capacity it can be done. This year has been an economic war, but you have the ability to make changes. Create brand new financial habits and blueprint. Enter 2010 with a new mindset and you may find yourself entering into a new, more comfortable, financial status.

 

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*Photography by Billy Montgomery.

Cicely V. Teal

Cicely V. Teal

Cicely V. Teal graduated from Northeastern Illinois University with a B.A. in Communication and Depaul Univeristy with a M.A in Journalism. She contributed to and maintained a column at N’Digo Magapaper, and wrote for Urban Influence Magazine, Breaking Tweets, The DePaulia and The Independent. She also worked on documentary projects at WTTW channel 11, children’s television programming at WCIU-TV and African American programming at Central City Productions.

She is a blogger and studies web analytics, social networking strategies and integrated marketing at the University of Chicago.


She can be contacted at Cicely@glossmagazineonline.com