As an Emmy award winning journalist for CNN Business News, Valerie Coleman Morris covered the world of business and finance, providing viewers with money management advice daily. Now as a popular lecturer on financial literacy and author of “It’s Your Money So Take It Personally,” Morris continues to educate the masses on the importance of developing a wealth-building strategy.
BLACK ENTERPRISE spoke with Morris during the American Express OPEN for Women: CEO BootCamp, a program that teaches women entrepreneurs business and financial strategies. BE asked her to provide some steps on how African Americans can develop a sound financial plan and start or continue to build wealth. Here’s the advice she offered:
Have a wealth building goal. There may be different ideas of what wealth is but the way to get there is all the same, according to Morris. “Take the first step. Get disciplined, know where your money is, know what your income is, know what your outflow is,” she says. “A lot of people can’t remember what they spent yesterday. That’s a problem. It’s a circle. If you have a budget, you know how much money you spent. If you know how much you spend, then you can make choices where to cut back.”
Do a financial assessment. How much money do you have, and from what sources? What are my absolute needs versus my wants? “You do those things and then you have a clearer view of how much you have to manage your life,” says Morris. “If you don’t know the numbers, all you’re doing is saying ‘I think I can.’”
Get your own house in order first. Then assist others. According to Morris, a new study shows that 57% of African American households are controlled by women. And those women tend to support people outside of their household as well. “What African American women tend to do is assist everybody, then they go, ‘OK, now what do I need,’” says Morris. “And that’s no way to have any kind of financial security. So we have to get more self-absorbed about our financial well-being so then we’re in a position of power and strength and security of our own to be able to assist other people. It can’t be done simultaneously.”
Teach good money habits early. Â It’s a proven fact that money habits — both good and bad — start at an early age, and that habits followed by parents continue on with their children as they grow up. “I teach financial literacy starting at the age of 3 and people say ‘how can a 3 year-old know anything?’” says Morris. Â “Because they walk through the grocery checkout stand and have a meltdown because they want everything that’s at their eye level. So you pick them up, let them have a meltdown and tell them ‘that’s not something you need.’ You keep repeating it and they’ll get it.”
Communicate with the family. Morris asserts that it’s very important that the entire household is on the same financial page. “If Dad got laid off, many people will say, ‘Don’t tell the kids.’ I say the exact opposite,” she asserts. “You have to celebrate the good and the bad. Over dinner, you tell the kids Dad got laid off and here’s what we’re going to do. There’s always a teaching opportunity. If everyone knows the circumstance, then everyone can cooperate.”
Build an emergency fund. Many financial experts recommend building an emergency fund that has 3-6 months of living expenses in case of the loss of a job or other such emergency, but Morris contends that 9-12 months is more realistic. “And if you lose your job and you plan to become an entrepreneur, you’ll want at least a year,” she points out. “Otherwise, how do you keep your business and your family going? Take a look at how much is in it and how you’re going to use it. Then look at where you’re going to save. Get everybody in the family involved in this.”