As a finance coach, I often find myself ruminating about money mindsets: those unconscious thoughts we have about money that we pick up when we're young. When I reflect upon my own financial journey – going from being completely clueless about how to do the basics, such as saving and budgeting, through to the trickier tasks, such as paying down debt and investing – I think back to those early money lessons I learned while growing up in a Caribbean household.
Money conversations, as well as other topics, were off the table within my Caribbean home. My mother was sent for (made to come over to the UK) as a teenager to be with her mother and younger siblings. She initially lived with her mum but the relationship soon broke down and she was kicked out. I often think about the strength it takes to fend for yourself as an 18-year-old in a new country: to find a job, somewhere to live, to earn money, to budget, to save, without any direction or guidance and no intergenerational wealth to rely upon.
The Caribbean generation that came before us did not travel for weekend city breaks or gap years. Aside from how much harder it was to get around back then, most did not have the luxury of such frivolous pursuits. In fact, my paternal grandparents came to the UK from Barbados solely to work and earn a living for themselves and to support family back home, a tradition that still exists to this day.
Money habits can start to form as early as 7 years old. When I was 7, my mother handled all the financial decisions for the family and she did so silently. These days, when someone gets on the property ladder or buys a new car, they post about it on social media and we all congratulate them. For my mother's generation, it was different. When she got on the property ladder by herself, a single mother of five, there was no such fanfare. In my biased opinion she was the original boss woman who should have been celebrated but back then you were not supposed to be boastful about money. Money decisions were kept to herself.
In hindsight, to be sat down and told how to save and budget, and to be included in money conversations, would have been helpful but I recognise that money lessons were not passed down to her. So while I was able to pick up my mother's work ethic, lying about my age to get my first job at 14, it didn't mean I knew how to save, budget or invest. The lack of money conversations in the household meant that, like my mum before me, I had to figure things out myself.
The truth is, I had to hit financial bottom (actual debt and default) before I recognised that my money habits were poor. Once I noticed, I was able to start fixing them – and if you've had a similar upbringing to me, you can too.
The first thing I did was notice my negative self-talk about money and replace it with empowering internal dialogue. "Stop telling yourself that you are broke," I would say to myself over and over again in a bid to alleviate the guilt, the head in the sand, the connotations of failure conjured up by the word 'broke'.
After this, I looked at my numbers and created a budget. Before I did this, I was constantly busy and if I knew payday was coming, or I could borrow a little extra to keep going, I did not stop to budget and it caught me off guard every single month. Stop and pay attention to where your money is going. Do your budget.
Next, I paid off high interest debts. I finally repaid my credit card and university overdraft. Depending on what you earn, paying off debt can be approached slowly, slowly like a snowball or in big chunks like an avalanche. Losing money on high interest debts is a terrible feeling and chipping away at them will build confidence.
I started paying myself first. Each month, my first transaction was to my savings account. Building up the habit of saving has been transformational. Eventually, it allowed me to step off the rollercoaster of work and to pursue other passions. You would not be reading this article if I had not started saving. With zero savings, I would not have created Black Girl Finance. Start saving, even if you begin with a small amount each month; you can always increase the amount being saved as your finances improve.
I took time to improve my credit score. Check for errors, utilise less than 30% of credit, get yourself on the electoral roll and do not miss payments. Finally, I was ready to invest. Investing makes your hard-earned money work for you. Start young, invest regularly and often, and think long term.
Getting your money mentality together may be daunting, especially when you didn't grow up talking and learning about things like budgeting and saving. But as a Black woman, it is key. In 2020, for every £1 of wealth in a white British household, a Black Caribbean household had 20p thanks to an unforgivable history of racial injustices and systemic inequalities. The educational money tools we arm ourselves with today mean we go some way to closing that wealth gap tomorrow.
All you've got to do is take that first step.
Selina Flavius is a finance coach and author of the personal finance book, Black Girl Finance: Let's Talk Money, which is published by Quercus Books on 21st January, £12.99. Buy it now.