“Making Healthy Choices to Spend Less and Save More to Create Wealth, while developing Wisdom”
I can be healthy, wealthy, and rich — oops, I mean Wise; oh, that’s dope! Hmmmm, where can I go to get all three? Well, to be healthier, I can eat out less and cook more. Wisdom may come with life experiences, but what about wealth? I don’t know what wealth means? Isn’t wealth for rich, white people?
Wealth to me is spending my money on a beautiful crib, cute clothes, and nice restaurants. Well, what is my Net Worth? Do you mean what I Am Worth? The Michael Kors bag cost $300, my Gucci Slides $400, my hair $600, my mani and pedi $150, plus my Fashion Nova dress. I AM WORTH more than a $1,000, right?
One thousand dollars of Material Wealth? Gurl Bye. Material Wealth is Not your Net Worth. Material Wealth are things such as cars, clothes, shoes, furniture, and technology devices — THINGS that we may see among our neighbors, friends, family, and ourselves. Once money is spent on material things, that money is gone and the item may be worthless or worth a lot less. These items typically do not increase in value over time.
Once money is spent on material things, that money is gone and the item may be worthless or worth a lot less.
Net Worth is everything you own (assets) minus everything you owe (liabilities). Your assets include your house, checking and savings accounts, 401K, mutual funds, cash value of life insurance policies and cash. Your liabilities and expenses include your mortgage, rent, utilities, car loans, credit card balances, payday loans, medical and dental expenses, technology expenses, childcare, and student loan payments.
To begin to create wealth we need to understand what we own and what we owe. We can start with a spending journal to record everything that we spend our money on.
Now let’s take the time and answer the 3Ws and 1H.
How are we spending our money?
What are we spending our money on?
Where are we spending our money?
Why are we spending our money?
Begin making wise changes to your spending, and over time you may be able to change Young, Black, and Broke to Young, Black and Wealthy.
Ms. Whatley has been a financial writer and educator for more than seven years and has served as a DFree trainer and coordinator for several financial cohorts in the DMV.