Black excellence was coming out of everyone’s lips this year, and while I love the motivation behind it, I hate the narrow-mindedness that’s also there.
Can you imagine how demoralizing, how patronizing it is to hear people talk about building multiple streams of income when you barely have one?
Whoever invented the phrase #blackexcellence probably had good, though somewhat self-centered, intentions.
I know what it’s like to start from the bottom, but I’m grateful that I’ve never started from the bottom bottom. The place where you only know generations of family members on government assistance and no savings account. The place where it’s more expensive to go to work than it is to have no job at all.
The advice we give, generally, to people who want to build generational wealth is helpful. But, it ASSUMES access to a minimum level of capital (money/cash, liquid assets) that many have never had before.
Are those folks included in the #blackexcellence movement? If so, how?
I want to use this opportunity to acknowledge them, the people who see everyone on social media posting about their latest LLC, and salaries coming from dividends in the stock market, with no idea how they can cash in on any of those options for growing their net worth.
I’ll spare us a long history lesson about how some may have gotten there (TLDR: systemic oppression) and cut straight to the chase: how do you start from the bottom bottom and arrive (as Drake would say) “here”?
A good first start is to know what you’re working with, even if you don’t have to guess that it’s not that much. Recording the money coming in and going out on a budget and on a ledger will help you see where there’s room to grow, and realistically how quickly that could happen.
I’m not gonna lie – looking at something like this may be hella depressing. You may want to throw your hands up, give up and ask “Why bother?”
The real definition of #blackexcellence is less about how quickly you can get rich than it is about how quickly you can unlock your the potential to create a better financial future. This is for yourself, your spouse/partner (if you have one), your children (if you have/want any) and their children’s children.
That’s why you should definitely sit with your significant others as you do this. Teaching one another how to manage finances and keep yourself fiscally accountable is an invaluable tool to excel forever.
A ledger helps you track how much you’re actually spending (as in RIGHT NOW), while a budget tracks how much you expect you need to spend for different things now and in the future.
The most important part to complete is the ledger, because this is giving you immediate feedback on where your money is going. What I like to do is write down how much income I know I’m bringing in every month, then start to subtract expenses based on bill statements, grocery store receipts saved from every week, and any memory of cash I gave up to pay for something (especially if, for instance, you don’t always get a receipt).
Once you see how much you’re spending, and how much is/is not left over, it’s time to make a decision. Are there some things you HAVE to spend money on to survive? Leave those things alone. Are there things that aren’t necessary or could cost less if you shopped around for lower prices?
I’d say put a line through the things that aren’t essential to live with, and put a circle around things that you could get for cheap (example: cheaper groceries or clothing). That’s a good starting point for your budget.
Have one column for “Fixed costs” budget items (the things that are essential to live with), adding up the total from the ledger. That’s the amount you absolutely have to budget for spending.
Label another column “Changeable” and list the items that have cheaper options, and put the lowest amount possible to spend on these things.
Also, try to plan for the unpredictable (label this “Emergency”). Include how much it might cost to buy both over-the-counter or prescription medicine. How much would it cost to hire a babysitter if absolutely NO ONE is around to take care of your children during an emergency?
Once you have those totals summed up, the next thing is to check whether your income is enough to cover those costs. If not, this is where some negotiating must happen.
It might feel unfair or upsetting, but you’ll need to cut things like going out to eat, or going on vacation to make sure everything (including the Emergency items) are paid for. Then there’s a very strong chance that even when you do that, your income still isn’t enough to cover the bare minimum.
Now what do you do?
Many of you know this already, because you do it already. You get a second job. You work extra shifts. This is literally hustling, but not the kind that most #blackexcellence influencers glamorize or highlight.
Working more jobs/shifts can be a huge strain on you physically and emotionally. Thankfully, we can make a plan so that they don’t have to be the only solution to your money problems.
Again, this is where the true definition of #blackexcellence shines through. This is your chance to use your imagination to think of creative yet concrete ways to get the additional income you need with less hassle.
This begins with being honest with yourself while listing your talents. What do people usually come to you for? Advice on cars? Your home-cooked meals? Hairstyles or makeup inspiration?
Take time during your day, even if it’s on the bus during your commute to work, to write these down. I would even rank them based on this list:
- the one most people bring up when talking about you;
- the one that’s easiest for you to do, given your work schedule and other responsibilities;
- the one that’s the least expensive to get started (for example, it doesn’t require you to buy any new supplies or rent a separate office); and
- the one you enjoy doing the most.
Once you have your top three, choose one and start planning. How will pursuing this new passion project fit into your daily, weekly schedule? Can you make this a family project, that then grows into a family business? I HIGHLY recommend hiring your children (if they’re at legal age) as employees and set them up with a checking and savings account so they begin to learn money management, too!
FUN FACT: if you employ your children and/or family members, you can write the salaries you pay them as a deduction on your taxes (based on the U.S. IRS guidelines and UK Business Tax Code). In the U.S., that means your income tax refund check could become larger than usual (translation: more money for you to add to savings).
I’d strongly advise you to begin using that additional income from tax refunds as your investment fund. It may be tempting to use it to cover living expenses, but I suggest that you don’t, especially if you’ve been sticking to the budget you created based on your usual income from work. A little as $1000 can go a long way in getting into the stock market and earning what’s called a passive income (passive = money you don’t have to work for to earn).
In addition to investing in stocks, you can invest part of your tax refund check into expanding your (family) business. This is how you can pay for necessary supplies, marketing for new customers, and even register officially as an LLC (limited liability company) and join the #blackexcellence bandwagon ;-).
This is all to say, the journey to self-employment and building wealth is not going to look the same for everyone. That doesn’t mean everyone can’t achieve it. It just means we have to be more aware of the different tools each of us will use to get to those #goals.