OCTOBER marks Black History Month - a month dedicated to sharing, celebrating, and understanding the impact of Black heritage and culture.
When it comes to finances, figures show that Black households have the biggest deficit compared to their white counterparts - that includes lower earnings, and less cash in private pensions, investments, or other assets1. Black women are also more likely to experience the ethnicity pay gap, a challenge that’s not widely spoken about.
The theme for this year’s Black History Month is, ‘Saluting Our Sisters’ which highlights the role that Black women have placed in shaping history, inspiring change, and building communities.
On Tuesday 17 October, Bola Sol, a Financial Adviser, and Influencer hosted a ‘Money Mindset’ discussion at Fidelity, where she explored the challenges that Black people face and highlighted the power of financial empowerment and independence.
Here are five key takeaways from her talk:
1. Your money mindset really matters
A money mindset is the attitude that you have about your finances. It’s largely influenced by past experiences around money.
Bola emphasised the importance of mindset when it comes to money. She posed two questions to the audience - ‘how do you talk about money?’ and ‘what are the stories you’re telling yourselves about money?’.
It’s possible that you may have picked up some financial rules from your parents and/or grandparents. If you came from a household where money was a taboo subject, you may have unknowingly picked this up too.
A positive money mindset may motivate you to budget, save and invest more over the long-term. Equally, a negative mindset may discourage you from practicing healthy financial habits. You may spend mindlessly, overspend and are less likely to save and invest.
If want to improve your financial wellness, check out Fidelity’s Financial Wellness Tool. You can find out how you are doing in four areas of financial wellness — budgeting, debt, savings, and protection.
2. Your financial journey will include ups and downs
Bola said that your financial journey won’t be perfect - actually, it involves ups and downs.
One month, you’ll stick to your budget; you’ll save some money, pay off some debt and even invest some money. Another month, you may not be able to save or invest because an unexpected bill came up - or your car broke down.
These things happen. It’s important not to beat yourself up about it.
One way to plan for unexpected events is to have an emergency fund - also known as a rainy-day fund - you can use the money to cover everything from surprise bills, car breakdowns, to redundancy.
Bola’s rule of thumb is to have at least 6 months’ worth of savings in this fund.
Don’t worry if you don’t have this yet, simply save a regular sum each month. That way you can build a nice pot for yourself. A great way to start is to create a budget, it will help you take control of your day-to-day finances and understand what’s coming in, what’s going out and where it's going – so you can prioritise spending and saving.
3. Pay yourself first
It’s easy to put others before you - especially if you’re a woman said Bola.
She told a story about how she spent £250 for a friend’s wedding and that didn’t even include the tailoring!
Remember to pay yourself first. That means you have enough for necessities, savings, and investments.
That doesn’t mean you neglect your loved ones, ensure you plan. Put events in your calendar. Each time you get paid, put some money aside for upcoming events.
4. Prioritise career growth
Bola said that career growth is important and offered some handy tips.
She encourages you to join professional groups and to prioritise networking, mentorship, and skill development.
That includes attending in-person events and tapping into social media. You can connect with likeminded individuals on LinkedIn. You can reach out to inspirational people on Instagram and X (formerly known as Twitter). Don’t forget to look at extra qualifications.
She also mentioned negotiating salary. Although it may be a touchy subject for some - Bola said you should be clear and confident and ask yourself - ‘what do I offer?’.
Although Bola was mindful that it’s important to look at how your employer is performing and the wider economy.
For example, if your company plans to cut jobs - or the economy is not performing well - it may not be the best time to ask for a pay rise.Her advice is to schedule a salary review in a couple of months - where the outlook may be sunnier. Still, it’s worth discussing with your manager. Bola said you can set a list of defined goals to help you when your salary review comes round.
5. Pay into your pension
Bola said that your pension is important. That’s because retirement can get expensive.
According to The Guardian, if you want a comfortable lifestyle in retirement, you’ll need to find £37,300 a year as a single person, or £54,500 a year as a couple. If you live in London, the cost rises to £40,900 and £56,500, respectively.2
You’re likely already saving into your workplace pension which is great news.
If you feel like you could save more in your pension - you can always increase your monthly contributions by 1 or 2% - or more if you can afford it. Use our calculator to see how a small change today can make a big difference to your pension pot tomorrow
Don’t forget you can make one off contributions. It’s worth adding some of your bonus in your pension, or even any birthday money. If you want to learn more about your pension - check out this handy video.
Remember, you won’t be able to access your pension until you reach 55. This is due to rise to 57 from 2028.