What Every Sister Needs to Know about Money
Married and single Sisters need to know their net worth and how to make their money work for them.
IN this age of massive company downsizing and rampant consumer debt, most Americans, especially Black women, are only two paychecks from poverty. For many, the possibility of life on the streets is fast becoming a frightening reality. Even dual-income families find it hard making ends meet. So Sisters, even married ones, cannot afford the luxury of ignorance when it comes to managing their money in these trying times.
The first step in effective money management involves figuring out how much you have to work with, or your net worth, which equals your assets minus your liabilities and serves as a blueprint of your financial success. Assets include cash from savings and checking accounts, certificates of deposit, 401(k) savings, individual retirement accounts, mutual funds, stocks and bonds, the current market value of your home or other real estate, precious jewelry, artwork and home furnishings. Liabilities include any and all debts--credit cards, student loans, auto loans, mortgages and other obligations.
To calculate your net worth, add your assets, then add your liabilities. Subtract the total of your liabilities from the total of your assets. The result is your net worth. If that figure is a negative number, its high time to take control of your debt. Author and financial advisor Cheryl D. Broussard says that your goal should be to increase your net worth (in the positive direction) every year.
Even if your debt surpasses the national deficit, don't be discouraged. Always approach money management with a good attitude. If you believe you will never get out of debt or amass wealth, you never will.
With this in mind, roll up your sleeves and put your house in order. Start by discovering and destroying the source of your financial cancer. Pay off your highest-rate debt first and when possible, double up payments. Don't spend unnecessarily or impulsively, and by all means, don't apply for more than one credit card. And only use it if you can pay off the balance within the grace period--even better, pay with cash. If you have access to a computer, there is plenty of easy-to-use money management software available. …