When COVID- 19 hit, everyone was caught unaware. Governments were forced to impose lockdowns and enforce measures to protect the citizens from contracting the deadly virus. By February 2021, the death toll had hit approximately 2.5 million and a lot of people had lost their livelihood.
When the economy closed in many countries, many people lost their livelihood. Businesses were collapsing and those who survived, downsized, cut down their employee salaries and adopted working remotely. One of the worst-hit sectors was the education sector. With children being homeschooled and everyone working remotely, families had to adjust accordingly to educate their children and still be productive at work.
Women who are mothers had a lot of pressure to deal with in terms of balancing their daily chores, their work and the emotional needs of their families. Single mothers who may have lost their sources of income were having it very hard. They had to stretch thin to fend for themselves and their families without the support of a partner.
With the onset of COVID-19 and the world being plunged into uncertainty, a lot of people realised they were broke. Women are however the most affected. As women, there are a lot of things that we need to survive monthly. We have expenses for our monthly periods, wardrobe, hair and makeup. With a loss or reduction of income, most women could not afford the lifestyles they were used to.
So what does being broke mean? Being broke is not the same as being poor. Being poor is accepting the condition of having no money while on the other end being broke is being unable to support your current lifestyle if you lost your source of income. Being broke implies spending above your means and having close to nothing in your savings account.
Of course, nobody plans on being broke but we end up in that category due to investments going sour or being neck-deep in debt. The sad reality is that a lot of us have accepted this as a way of life. We see it as trendy to discuss how broke we are with our friends but never do anything about the situation.
As women, we need to change the mentality we have towards money. We need to start thinking about money in terms of how much we keep instead of how much we earn. You can be a vegetable vendor making twenty dollars a day or a company director earning two thousand dollars a month and still not know how to manage your funds.
We have to change our mindset that worrying about money is a man’s thing. As we have been fighting for equality in every aspect, we have to believe that we are just as worthy of holding large sums of money and having full control of it.
One of the most important money lessons we may have probably learnt during our fight against COVID-19 is that we can’t afford to be broke anymore. We should never be caught off guard again. It is time to change our money habits and achieve the dream of financial freedom. To do this we need to develop the mindset of wealth creation. We have to start understanding that the same way you spend, manage and invest 80 dollars is the same way you will spend, invest and manage ten million.
So how can we dig ourselves out of this rabbit hole of being broke? Here are a few action points you can start working on.
Calculate your net worth and live below you means
How much are you worth? Your net worth is your liabilities minus your assets. Make a list of all your assets and how much they are worth and a list of all your expenses including transactions, hair, mani-pedi and even clothes. Do the math and find out how much you are worth.
Separate your needs from your wants and cut out what you do not need to survive. This could mean reducing the number of channels on your cable TV, cooking instead of eating out and possibly doing the chores by yourself instead of paying a house help.
Living above your means is the reason why you are broke! Living below your means will help you reduce costs and start clearing those impending debts. Living debt-free means you now have money to put towards your saving account and eventually start building a steady emergency fund. In case you lose your job or a family member falls ill, you can always tap into these funds and stay afloat. Remember, whenever you take out money from your emergency fund, replace it as soon as possible.
Maximise on your sources of income
Black women are amazing, smart multi-talented people! Sit down and think of all the things you are passionate about and have ever thought of doing but never got the chance to do. You could be good at weaving mats, baskets, carpets, braiding hair, drawing, dancing, you name it. What have you done with these skills?
Turn your talents into a source of income. You may not even need a lot of capital to get started. If you are good at braiding hair, start braiding right at your doorstep. If you can cook better than everyone else, find out from local offices if they would be interested in having lunch delivered to their doorstep.
Be proactive! Do not sit on the gifts when you can use them to increase your income! On the other hand, you can also approach your boss and ask for a raise. Just be courageous enough to plead your case. Besides, not everyone is cut out for the entrepreneurial journey, you can still use your current skills to make it.
Set financial goals
You probably set up new year resolutions but never quite included financial goals in that mix. You have planned to lose weight, grow your glutes, travel all around the world and even learn how to cook. However, getting out of debt, building wealth or learning how to budget did not make the cut!
This year has to be different. We can’t make the same mistakes we have been making over the years. We need to set SMART financial goals.
They do not have to be huge, like start a multi-million dollar I.T firm though there is no problem with that! We can start by clearing our debts within the first half of the year. We can save twenty percent of our active income each month towards an emergency fund and we can also find a way to increase our passive income! Our active income is the money you make from services rendered such as from your job or your business while passive income is money you make while you are sleeping such as from your stock portfolio dividends. Let this year be the year you work on your financial goals.
You are such a beautiful woman and broke does not look cute on you. Let us be accountable to each other and fix each other’s crowns. Do not let a sister go broke, teach them a thing or two about managing their finances. The goal is for all women to achieve financial freedom!
So what exactly does it mean to be financially free? This is when your passive income or the value of your assets exceeds your expenses. It is at this point that you will have accumulated enough money to comfortably pay for your lifestyle. When you do, pop that champagne bottle or drink that chai latte and celebrate your wins!
COVID-19 and its subsequent effects have opened our eyes to where we stand financially. Let’s not continue to turn a blind eye to the situation on the ground. Let us take charge of the situation and choose to challenge ourselves this year! Good luck.