Girl To Girl: Money Edition — Women Are Sharing Money-Saving Tips And Hacks To Keep Your Credit Cute And Your Pockets Fat

“Get life insurance.”

Get life insurance! Get it for yourself, your parents (if they don’t have a policy naming you as the beneficiary), your spouse, and your children. So much of generational wealth is built like this. Death is inevitable, at least with life insurance you or your family members can get a lump sum of money that could be life changing. Just think about it: $100k, $250k, $500k, and $1mil can be a down payment on a brighter future.

For parents who are older, consider term-life insurance. The term expires, and then you have to get more. So if you get a 20-year term policy, you pay the premiums (which can be less than $100 a month), but if the death doesn’t occur within the 20 years, you get nothing and have to buy a new policy.

Get whole-life insurance for younger folks. It NEVER expires, as long as you pay the premium, and the premium doesn’t increase. So, if you get whole for a 20-year-old and they live to be 90, you get paid. It also builds cash value over time that you can cash out or borrow against. It’s an investment with a guaranteed payout upon death. It’s much more expensive than term, but that’s why.

—u/Golden_standard

“Don’t buy outside of your means.”

• When you buy a house, don’t buy outside of your means. Particularly due to social media, I think people suffer from “keeping up with the Joneses.” They think they need a 5-bedroom home and 3000 sq ft. when they are only a family of four. More home brings more problems…money problems.

I could have afforded a more expensive home, but I chose to get a starter home. I’m only one person. My mortgage is so low I literally never have to think about it.

—u/__looking_for_things

• The wealth formula I have always pursued is: 1) maximize income because for Black folks gifts/inheritance is unlikely, so income is the only way we generate funds to save; 2) consistent savings/investing through up markets and down markets; 3) home ownership, which is a powerful wealth creation tool for multiple reasons; and 4) living below your means because if you don’t, the saving and investing won’t happen.

Living below your means is tough for us because, on average, our incomes are below our white peers, but also, when we get a little cash coming in, it is tempting for us to want to buy and show status markers – from designer threads to luxury cars. That’s understandable, given what we see folks doing on social media, as well as a desire to feel good about ourselves and counter the way society sees us. But it is a habit that destroys wealth. Books like The Millionaire Next Door: The Surprising Secrets of America’s Wealthy do a good job of explaining how this works.

—u/LivingWhileBlack