More than 1,100 readers from Twitter, Facebook and our exclusive ESSENCE Insiders panel recently responded to a survey about how well they manage their finances. We were interested in discerning if you, like many hardworking women of color, were spending your money as fast as you were making it. The results were astonishing. While 65 percent of the women polled said they are "satisfied" or"extremely satisfied" with their financial situation, a closer look at the data revealed that 74 percent describe themselves as living paycheck to paycheck, and 75 percent are worried about their long-term financial future. Most likely, U.S. consumer debt, which is currently $11.4 trillion (including mortgages, credit cards, and auto and students loans), is to blame. Knowing that sound fiscal management is one of your primary paths to a better life, ESSENCE explored how you allocate your earnings and gathered these tips on how to gain financial independence.
WHAT'S STRESSING US?
Quite a few things, according to those who took part in our survey. Saving enough for retirement ranked high on the list of items making you worry about your financial future, as did personal health and paying for children's college education. Here are the biggest areas that cause you agita when you ponder your financial situation:
• 75% Saving enough for retirement
• 71% Getting out of debt
• 67% Staying healthy
• 65% Having enough money to pay bills
• 47% Staying employed
• 45% Affordable health care
• 38% Paying for your children's college
• 36% Overspending on life's luxuries
THE MONEY TRAIL
Since Black women's average earnings equal 64 cents on the dollar, according to the U.S. Census Bureau, our financial focus tends to shift toward more immediate needs such as food, shelter, children and debt. And let's not forget the necessary, but expensive, car note. If you're wondering where to start reducing expenses and increasing your income, take a serious look at how much of your money is going toward the categories below.
• 53% Spend less than $100 weekly.
• 47% Spend more than $101 weekly.
• 6% Spend more that $401 per month.
• 47% Have no child care expenses.
STUDENT LOAN DEBT
• 26% Have $10,000-$50,000 in student loan debt.
• 22% Have $50,001 or more in student loan debt.
CREDIT CARD DEBT
• 28% Have less than $2,500 in credit card debt.
• 31% Have more than $5,001 in credit card debt.
RENT OR MORTGAGE
• 49% Pay less than $1,000 per month.
• 41% Pay more than $1,001 per month.
• 35% Pay less than $300 per month.
• 29% Pay $301-$500 per month.
To read more on Where Does Our Money Goes, please pick up the January 2015 issue of ESSENCE Magazine.
This excerpt was originally published in the January 2015 issue of ESSENCE Magazine, on newstands now!