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It is essential to have financial literacy in order to secure your financial future. However, many individuals are lacking in understanding money matters. According to the 2023 TIAA Institute-GFLEC Personal Finance Index, certain demographic groups, particularly Black Americans, are lagging behind in financial knowledge. On average, U.S. adults answered 48% of the Personal Finance Index money questions correctly. However, the average for Black Americans was 34% and for Hispanics it was 38%.
Furthermore, a 2023 Pew Research study found that 68% of Black adults do not feel they have enough income to live the life they desire. On a positive note, the study also found that despite the lack of sufficient income at present, 58% of Black adults are optimistic about achieving their desired lifestyle.
There are numerous Black financial influencers who are working to assist people in achieving their desired lifestyles. They are helping bridge the financial knowledge gap by sharing personal finance knowledge, leading important discussions, and empowering individuals along the way.
We asked influential individuals who are making an impact some questions about budgeting, money mistakes, financial education on social media, and side gigs. Here’s what they had to say.
Responses have been edited for length and clarity. Learn more about each financial pro following the questions.
Sticking to a budget can be tough. What are your best tips for staying on budget?
Trae Bodge. (Photo by Justin Hackworth)
Trae Bodge (expert on smart shopping and saving money): Similar to many commitments we make (diet and exercise come to mind), we often fail to recognize what is truly achievable and end up attempting something that is ultimately unsustainable.
Initially identifying wants versus needs, spending traps, goals and aspirations — as well as what’s really important to you — can be very beneficial, especially if you are in a partnership.
Rahkim Sabree.
Rahkim Sabree (financial therapist and author): Ensure that the numbers align with your values. Many people approach budgeting like a fad diet. If your financial goals do not align with your values, or if you’re setting goals just because you think it’s the right thing to do, you are unlikely to stick to it. Allocate for periods of enjoyment and milestone rewards in your budget that give you an incentive to continue — and no, you don’t have to give up coffee. Just plan for it.
Ericka and Chris Young.
Ericka Young (co-host of the “For Better & Worth” podcast with husband Chris): Disconnect your debit and credit cards from shopping apps to minimize unnecessary purchases. Unsubscribing from email lists will reduce the temptation to shop too.
Give yourself time to improve your budgeting skills. Budgeting is a learning process and may take a few months to fully grasp and implement effectively.
Yemi Rose.
Yemi Rose (founder and CEO of OfColor, a financial wellness platform for employees of color): Recognize that a setback … doesn’t mean the entire effort has failed or is over. The emotional letdown from going slightly over budget can actually make us keep spending if we view our budget as “already busted.” You have to give yourself grace and recognize that establishing and sticking to a budget is not a single decision you make and then store it away in the brain. It’s dozens of small choices that we make every day. Impulse purchases happen, and a single slip-up is just that.
What’s a money mistake you recently made? What did you learn from it?
Yemi Rose: I’ve found apps like Cash App and Venmo to be very useful. … However, I recently fell into the trap of not monitoring my account balances carefully enough and allowing payments that came in to accumulate. That cash balance was not accruing any interest or working for me at all.
Now, I have friends who see that accumulating balance as a kind of forced savings mechanism — like overpaying a bit on taxes and then getting a lump sum back later on via a tax return. But there are some really attractive rates out there right now, so letting my balances accumulate was practically turning down “free” money that I could have been earning through interest payments.
Ericka Young: When we moved into our home, we assumed the payments on a soft water system. We have been renting it ever since. If we had made it a priority to purchase a system immediately, it would have cost us a lot less than the payments we have made over time. We learned that most of the time it costs you significantly less to purchase a large item than to rent or lease it.
How has social media changed the way people learn about money?
Rahkim Sabree: Social media has provided people with greater access to financial concepts, tools and terms. This is a double-edged sword, however, as oftentimes licensed financial professionals are limited in what they can share due to compliance regulations. This creates an opportunity for individuals with no financial training and background to spread misinformation and place products or services in front of their audiences that may be harmful.
Malcolm Ethridge.
Malcolm Ethridge (author, executive vice president at CIC Wealth): With so many different platforms and so many varying opinions out there, social media has made it tougher for people to tell the difference between quality financial advice and noise. However, by doing a quick Google search and reviewing a person’s background, credentials and online reviews, it becomes a little easier to discern who is simply trying to sell a product and who is sharing an informed opinion.
Yemi Rose: Because of our work, we hear all of the money myths that catch fire online, especially within specific cultural spaces. … The medium is so rich.Fast and easy-to-digest content is designed to be memorable. Obvious scams are often mistaken for truth because they may be associated with familiar personalities, even if they are not personally known. People of color in the United States have been exploited by financial systems that were not designed to benefit them, leading to a natural confirmation bias when encountering opportunities that are outside or challenge that system. This makes crypto scams and unrealistic promises of free money particularly appealing to this group. The lack of generational wealth, combined with the constant presence of peers flaunting wealth on social media, makes it difficult to resist such offers.
Advice for Taking on a Side Gig
Yemi Rose: The glorification of the “side gig” is a symptom of a system that is failing many people, especially those of color. Anyone considering a side gig should have a clear understanding of what they stand to gain and sacrifice. If the goal is to earn more money, there should be a plan for future financial stability or business growth. It’s also important to consider the physical and emotional toll of working additional hours.
Trae Bodge: Side gigs can be both rewarding and disappointing, so it’s crucial to have realistic expectations. Thoroughly researching the pros and cons of different side gigs is essential, especially those that require an upfront investment or time commitment. Seeking out reviews and advice from others can be beneficial before making a decision.
Ericka Young: Exploring seasonal employment opportunities can lead to long-term prospects. Identifying one’s skills and areas of expertise can streamline the search for relevant opportunities. Engaging in activities that are genuinely enjoyable can make the most of free time and minimize work-related stress.
Malcolm Ethridge: For those who do not rely on additional income to cover monthly expenses, a side gig presents an opportunity to boost savings and potentially achieve financial independence earlier. There are also significant tax benefits and retirement plan options that offer higher contribution limits.
About the Influencers
Trae Bodge is a recognized lifestyle journalist and TV commentator known for her expertise in saving money and smart shopping. She has made frequent appearances on major television networks and is regularly quoted in publications.
Malcolm Ethridge is a writer, speaker, and executive vice president at CIC Wealth, where he leads a team in creating customized financial plans for working professionals facing complex financial situations.
Yemi Rose is the founder and CEO of OfColor, a financial wellness platform focused on empowering employees of color. The platform combines fintech with culturally relevant content, financial coaching, and therapy.
Rahkim Sabree is a financial therapist, accredited financial counselor, and thought leader on financial trauma, with several published books and a Forbes column to his name. He is also the founder of the Overcoming Financial Trauma newsletter.
Ericka Young and her husband Chris co-host the award-winning podcast For Better & Worth, where they discuss how to manage finances while maintaining a healthy relationship. They emphasize that building net worth does not need to come at the expense of a fulfilling relationship.
