If you answered "no" then don't feel bad because you're among the majority of Americans who say that they simply do not have the means to come up with that kind of money within a month's time. Per the Wall Street Journal:
The survey asked a simple question, “If you were to face a $2,000 unexpected expense in the next month, how would you get the funds you need?” In the U.S., 24.9% of respondents reported being certainly able, 25.1% probably able, 22.2% probably unable and 27.9% certainly unable. The $2,000 figure “reflects the order of magnitude of the cost of an unanticipated major car repair, a large copayment on a medical expense, legal expenses, or a home repair,” the authors write.For many Americans who are living check to check, it is not difficult to see how an unexpected car repair or medical bill can literally make the difference between making ends meet and not being able to make your monthly rent payment - especially in this economy. This study tends to confirm the most important yet often unspoken issue facing our country and its elected officials: our proud capitalist society is designed to keep the rich rich and to keep the poor poor.
If you're among those who happen to be working right now, chances are you probably work some variation of the classic 9 to 5 job with ok benefits that allows you to pay most of your bills and occasionally go out on the weekends or maybe even take a vacation or two if you're lucky. You would think that being a part of this "American Dream" would afford you with the means to tackle an unexpected $2,000 dollar expense, but not so much. For many of us, the sad reality is that we are likely so caught up living check to check that we rarely ever have a chance to save or invest our money into anything other than our daily expenses.
For young professionals in the Black community this reality is all too familiar. Even some 50 years after Brown v. Board of Education, many young Black professionals today are likely the first-generation of college educated individuals within their respective families. Due to this fact, Blacks and other minority college graduates are often effectively required (and sometimes expected) to carry the additional burden of being the financial support for the entire family. As such, they are far too often relegated to the majority of Americans discussed in the WSJ article above who are "financially fragile." Despite their academic attempts to "pull themselves up by their bootstraps," they find that family obligations tend to keep them from making the investments necessary to break out of their "check to check" existence.
Although the sources of the disparities between Black and White household income in America are too voluminous to count, at the end of the day we can all do a better job at making our proverbial dollar out of 15 cents. Even though America is the self-proclaimed land of opportunity, anybody who wasn't born into the top 2% understands far too well that the readily available "opportunities" in America will only get you so far. The rich don't have to work and if you're working for somebody else then you most definitley are not rich. Therefore, we put our heads together and came up with the following suggestions based on our own experiences that should help all of us become better prepared should an unexpected expense rear its ugly head:
- Pay yourself first
- Reduce grocery bills
- Pay off credit card bills (if you need to pay for something on credit then you don't need the item)
- Have a stronger distinction between needs and wants
- Know the pay range for your job so you'll have a stronger negotiating point (if you start low your raises will all be based on that lower number and it gets harder to catch up)
- Reduce phone/cable bills
- Clip coupons/send in rebates/look for deals
- Put pay raises into investments
- Learn how to negotiate harder/shop smarter on just about everything (especially big ticket items)
- Learn to say "NO" (occasionally) to family/friends looking for a handout
- Plan where you want to be 1 yr, 5 yr 10 yrs down the road
- Have a good idea of what things cost and you will be more likely to take steps to get there
1. If you were to face a $2,000 unexpected expense in the next month, would you be able to come up with the money? (why or why not?)
2. Do you feel that young professionals of color have an added burden when it comes to family that White professionals may not have to deal with?
3. How do we reduce the income gap between Whites and minorities?
4. How do we reduce the income gap between those born into wealth and those who are not born into wealth?
5. What successful financial advice have you learned over the years?