As most recent college graduates or anyone that is trying to repair their financial situation knows, it isn't easy. If anything its a bit frustrating since it's 2015 but yet Wall Street and big corporations continue to get bailouts and tax cuts, meanwhile us honest hardworking middle and working class citizens only get higher interest rates on credit cards and loans. Even with a solid paying full time job, it still almost feels impossible to move ahead. Now by no means am I any kind of financial expert or guru, but instead, I am a regular American that is working hard to attain the American Dream. Having financial independence is clearly the goal, but how do we get there? Especially as a young black man, we are essentially born into debt, so how do we get ahead when we started from behind?
Now there isn't a correct path or set of steps that you MUST take. Its different for each and everyone of us. But it is important to take a next step. Personally, one of the most important steps I could take, was a step back. After completing two years of college, I left to further my love for video production. I was incredibly naive to just think that I could easily start a production company. Whether I tried to work independently or with a few others, it ultimately "failed," at least based on the expectations that I had. But without getting too much into the details, I knew I had to return to college to get my degree. For me, this was clearly the most important thing that I could do to help with attaining financial independence. I felt that having a degree would open up more opportunities, allowing me to make more money... because after all, you can't improve your personal finances if you spend more money than you earn. So although I would be getting more bills and debt for the time being, in the long run, it'll be a good investment that will amount to more money.
As a full time student who also competed on the college club rugby team in the fall and the Men's Track and Field team during the winter and spring, my schedule was already pretty tight. So finding a means of income was important, but tough since it had to fit into my schedule with classes, studying/ homework and sports. I was lucky to find work on campus. I was a stair sweeper in the mornings in two buildings, and did video production work for the schools media department. Along with this, I had the occasional freelance video gig as well as the occasional check from this blog and youtube videos. So although more money was being spent towards my education, I did have a little money coming in too.
Eventually I made it through my final two years of college and graduated, of course with a nice chunk of debt too. Now as I continue to move forward towards this financial independence, I'm seeing how incredibly important it is for me to stay on top of my game. So here are a few steps that I have taken to ensure I reach my goal:
Some Important Steps to Take to Help You Towards Financial Independence:
- Evaluate your financial situation. Literally add up all of your bills and debt; college loans, credit cards, utilities, car expenses, rent and everything in between. Create a list of monthly expenses and one with general debt that you have already been hit with. Whether you want to find some sort of app to download such as MINT or create a spreadsheet, you definitely want a list with all of your monthly expenses and debt. By doing this you will be able to actually see where you stand regarding your overall financial position, as well as a potential forecast of what you can expect to pay over the next year. And if you want, feel free to take the next step and jot down your monthly income to determine what is left after your bills. Don't run out on a shopping spree with the remaining money (if any), but instead put it save it.
- Open a savings account. If possible, it is highly recommended that you put at least 10% of your income into a savings account. This is incredibly hard for me, especially since my bills almost add up to my total income, what little money left over can easily be spent at the bar, clothes or something else. But between a rainy day when you'll need extra money, or for a small trip that you might have in mind for next spring, this savings account will be clutch when you need it most... so try not getting your hand caught in the cookie jar. Even having two separate accounts could be a good idea. One account for rainy days since you never know what unexpected bill will surprise you, and the other account for splurging (which isn't recommended but I get it, we only have one life to live - so have fun, but in a responsible manner while planning ahead).
- Open a secure credit card. This will allow you to repair/ build your credit. Personally, I first messed up my credit early on when I was 18. My mother needed help with her car, she needed new tires, and of course I wasn't going to say she couldn't use my credit card. At that time I was just about to stop working at my summer job and head up to college as a freshman. My part time campus job paid peanuts and basically, I fell behind on payments and the rest is history. So a secured credit card is ideal for anyone who is trying to repair their credit. I still have two secured credit cards that I have paid on time from day one, and as a result, I have seen an improvement with my credit score. So if you don't have any credit or your credit is bad and you are looking to rebuild it, definitely consider a secure credit card.
*And note, don't get fooled by the pre-paid credit cards like NetSpend or the RushCard, they don't help with repairing your credit. The only similarity is that you start off by loading the card with money and they both seem to work like a normal credit card where you can use them anywhere with a MasterCard or Visa logo. They aren't horrible, I actually still have a Netspend card, but clearly I don't use it as much as I used to now that I know about secured credit cards.
- Pay bills on time. The only way you can get to financial independence is by paying all of your outstanding and current bills on time. I had a bunch of small bills that I owed, maybe a phone bill here, or a overdraft fee from a previous bank account... whatever it may be, you need to make some sort of arrangement to work towards paying it off. Some bills were paid in full at once. Other bills were paid on a bi-weekly or monthly basis. And don't ignore the bill collectors when they call, send a letter or email you. Talk to them. They are dealing with hundreds and thousands of other Americans who are also struggling to get by, so they should understand where you are coming from. They just want to see that you making an effort to actually pay off the debt.
Again, these are some generic steps that you should consider. Often times the most obvious things are over-looked, so just take a step back and re-evaluate your financial position. For now, we'll leave it here. Maybe in another 3-6 months I'll create a list with some additional steps, but first let's see how well things go for me as I continue to implement the steps mentioned above.
And on that note, always keep your goals in mind and never give up... no matter what. Even if you get hit knocked down, unless that hit kills you, you should still be fighting with the last ounce of your heart. I know there were times where I wanted to give up, and luckily I didn't. Keep the faith and keep it moving, because we will get there~