If you’re like me, springtime represents renewal (in more ways than one). And in addition to cleaning out our closets, purging our homes, and doing that long awaited spring cleaning, there’s no better time to rejuvenate your financial situation than now.
With the weather finally turning (at least for our East Coasters), it’s time to talk about concrete financial moves you should make before the season changes again.
The wealth gap in America remains a persistent challenge for Black communities. According to Federal Reserve data, the typical white family has eight times the wealth of the typical Black family—the median white household had $188,200 in wealth compared to $24,100 for Black households. This disparity is rooted in generations of systemic barriers to wealth accumulation, from redlining to discriminatory lending practices that continue to shape our financial realities today.
But knowing the odds doesn’t mean accepting them. In fact, it makes strategic financial planning even more crucial. Here are five financial goals to tackle before spring transitions to summer:
Reassess your tax situation.
Some of us dread Tax Day (raising my hand), because we always seem to owe. But for others, it can be a great way to stack your refund and create a money plan on what to do with it. With the day fast approaching in April (because somehow it’s already March), now’s the perfect time to make sure you’re maximizing your return. The average tax refund in 2024 is hovering around $3,100 according to IRS data and this is money that could jumpstart your savings or help pay down debt.
For Black households, tax time can be particularly significant. Research from the JP Morgan Chase Institute shows we’re more likely to use tax refunds for debt reduction and essential expenses than other races, and while we shouldn’t have to wait until this time of the year to do so, it’s a reality for many. Knowing that fact, consider allocating at least a portion of any refund toward wealth-building activities rather than immediate consumption.
Also, if you haven’t already, now is the time to look into credits you might be missing. The Earned Income Tax Credit (EITC) goes unclaimed by approximately 20% of eligible taxpayers each year, leaving billions on the table according to the IRS. Child Tax Credits and education credits are other areas where many leave money behind.
Build your emergency fund.
I know, I know. It seems like as soon as the money goes in, it’s time for it to go out. But as difficult as it may be for many who are living paycheck to paycheck, it’s crucial to have something in your account for a rainy day — especially in Trump’s America. Why? Because financial emergencies hit Black households particularly hard, and can set us back even further than we systematically are. With lower average household wealth to fall back on, unexpected expenses can quickly become financial catastrophes.
Aim to save enough to cover three to six months of essential expenses, as recommended by the Consumer Financial Protection Bureau. Start where you are—even if that’s $1 week, and you that’s all your can afford. Once you hit an initial goal of $500, try and see if you can set up automatic transfers on payday so your emergency fund grows without requiring constant discipline.
Check your credit and make a debt reduction plan.
The racial credit score gap persists, with Black Americans having average FICO scores approximately 60 points lower than white Americans. This translates directly into higher interest rates and reduced access to affordable credit.
And no you don’t have to pay a tax person to help you check your credit. Pull your free credit reports from annualcreditreport.com, and then use it to create a concrete plan to reduce high-interest debt, starting with the smallest balances or highest interest rates depending on what motivates you more.
Revisit your retirement strategy.
The retirement savings gap is perhaps the most stark—according to the Economic Policy Institute, white families have typically accumulated $120,000 more in retirement savings than Black families by retirement age. Many factors contribute to this gap, including lower access to employer-sponsored retirement plans and earlier withdrawals due to financial emergencies.
If your employer offers a 401(k) match, make sure you’re contributing at least enough to get the full match—that’s free money. If you don’t have a workplace retirement plan, consider opening an IRA. The key is consistency, even if you’re starting small.
Invest in your financial education.
Financial literacy is about developing the confidence to make informed financial decisions. Historically, Black communities have had less access to financial education and fewer opportunities to learn about investing from family members who’ve done it successfully.
Commit to learning one new financial concept each week this spring. Whether it’s understanding how compound interest works, learning the basics of stock market investing, or researching real estate opportunities in your community, expanding your financial knowledge is perhaps the highest-returning investment you’ll ever make.
We all know the financial playing field isn’t level, but we can’t let that deter us. There’s still time to make progress, you just have to make sure you start today. Like right now.