Financial Adulting

1. Financial Adulting: A Journey, Not a Destination

Being a financial adult is a lot less daunting than it sounds.

Embrace Continuous Growth. Financial adulting isn't about achieving a fixed state of expertise but rather embarking on a continuous journey of learning and adaptation. Mistakes are inevitable, and each one presents an opportunity for growth. The key is to approach personal finance with a mindset of curiosity and a willingness to learn from experience.

Small Steps, Big Impact. The path to financial confidence is paved with small, consistent actions. Instead of attempting drastic overhauls, focus on making incremental improvements over time. These small steps, when compounded, can lead to significant and lasting results. This approach makes the process more manageable and less overwhelming.

Personal Finance is Personal. There is no one-size-fits-all approach to financial adulting. What works for one person may not work for another. It's essential to tailor your financial plans to your unique circumstances, goals, and values. This personalized approach ensures that your financial decisions align with your overall well-being and happiness.

2. Equity and Personal Finance: Recognizing Systemic Inequalities

We can’t pretend we’re all starting from the same place – we’re not.

Acknowledge Systemic Barriers. Personal finance cannot be discussed in a vacuum, ignoring the systemic inequalities that affect every aspect of our financial lives. Factors such as race, gender, and socioeconomic background create disparities in earning potential, access to resources, and opportunities for wealth accumulation. Financial success cannot be solely attributed to individual actions.

Historical Context Matters. Understanding the historical context of policies and practices that have systematically excluded and exploited BIPOC communities is crucial for addressing the racial wealth gap. Policies such as the Homestead Act, the Freedman's Savings Bank failure, and redlining have had lasting impacts on wealth accumulation for marginalized groups.

Privilege and Responsibility. Recognizing one's own privilege is essential for promoting equity in personal finance. Those who benefit from systemic advantages have a responsibility to use their privilege to help close racial and gender wealth gaps. This can involve supporting financial educators and businesses owned by women and BIPOC individuals, advocating for policy changes, and challenging discriminatory practices.

3. SMART Goals: Charting Your Financial Course

The whole point of having money is to have and experience what you want, and that looks different for each of us.

Define Your Aspirations. The foundation of financial adulting lies in identifying your personal goals and aspirations. These goals can range from traditional financial objectives, such as building an emergency fund and saving for retirement, to lifestyle upgrades and using money for good. Clarifying your goals provides a sense of purpose and direction for your financial decisions.

SMART Framework. To ensure that your goals are actionable and achievable, frame them using the SMART framework:

• Specific: Clearly define what you want to achieve.
• Measurable: Quantify your goals to track progress.
• Attainable: Set realistic goals that are within your reach.
• Relevant: Align your goals with your values and priorities.
• Time-Bound: Establish deadlines for achieving your goals.

Prioritize and Plan. Once you have defined your SMART goals, prioritize them based on their importance and urgency. Develop a preliminary plan that outlines the steps you need to take to achieve each goal, including monthly contributions and timelines. This plan will serve as a roadmap for your financial journey.

4. Income: The Foundation of Your Financial Plan

Policy is critical and completely intertwined with our financial lives.

Map Your Inflows. The first step in creating a financial plan is to accurately map out your income streams. This includes your salary, side hustles, and any other sources of revenue. Understanding your income provides a clear picture of your financial resources and sets the stage for effective budgeting and goal setting.

Address the Wage Gap. Recognize the systemic racial and gender wage gaps that affect earning potential. Women, particularly women of color, often earn less than their male counterparts for the same work. Advocate for policies that promote equal pay and challenge discriminatory practices in the workplace.

Negotiate Your Worth. Take proactive steps to negotiate your salary and benefits. Research industry standards, highlight your accomplishments, and be prepared to walk away if your compensation doesn't reflect your value. Negotiating your worth is an essential step in closing the wage gap and maximizing your income potential.

5. Expenses: Understanding Your Money Outflows

Money is also really emotional and in a lot of ways is very similar to food.

Track Your Spending. The first step to managing your expenses is to become aware of where your money is going. Track your spending for a month or two to identify your spending patterns and areas where you may be overspending. This awareness will empower you to make informed decisions about your money.

Sinking Funds for Irregular Expenses. Large, irregular expenses can derail your financial plans. Create sinking funds for these expenses, such as travel, holidays, and annual subscriptions. By setting aside a small amount each month, you can avoid financial stress and stay on track with your goals.

The Pink Tax. Be aware of the pink tax, the practice of charging women more than men for identical products and services. Support companies with gender-neutral pricing and advocate for policies that promote fair pricing. By challenging price discrepancies, you can help level the playing field for women.

6. Consumer Activism: Aligning Spending with Values

The collective good needs you.

Vote with Your Dollars. Consumer activism involves using your purchasing power to support companies and causes that align with your values. This can involve buying from ethical and sustainable businesses, boycotting companies with harmful practices, and giving to nonprofit organizations.

Define Your Criteria. Identify the values that are most important to you, such as environmental sustainability, social justice, and ethical labor practices. Use these values to guide your purchasing decisions and support companies that share your commitment.

Research and Evaluate. Before supporting a company, research its practices and policies to ensure they align with your values. Look for certifications, read reviews, and consider the company's overall impact on society and the environment.

7. Work Optional: Investing for the Future

When women are wealthy they have more financial agency.

Harness the Power of Compound Interest. Compound interest is a powerful tool for wealth accumulation. Start investing early to maximize the growth potential of your money over time. Even small, consistent investments can yield significant returns in the long run.

Maximize Employer Matching. If your employer offers 401(k) matching, take full advantage of this benefit. Employer matching is essentially free money that can significantly boost your retirement savings.

Understand Investment Options. Familiarize yourself with different investment options, such as stocks, bonds, and mutual funds. Choose investments that align with your risk tolerance, time horizon, and financial goals.

8. Credit Score: Understanding and Improving Your Financial Reputation

Black people are paid less, the things they own are worth less, but then you tell me to pull myself up by my bootstraps.

Credit Score Matters. Your credit score is a numerical representation of your creditworthiness, and it plays a significant role in your financial life. A good credit score can help you secure lower interest rates on loans, credit cards, and mortgages, saving you thousands of dollars over time.

Check Your Credit Report. Obtain a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) and review it for errors. Disputing and correcting any inaccuracies can improve your credit score.

Payment History is Key. Payment history is the most important factor in determining your credit score. Make all your payments on time, every time, to maintain a good credit standing.

9. Debt: Managing and Conquering Your Financial Obligations

Black women live at the intersection of race and gender so we’re always fighting two battles.

Acknowledge and Understand Your Debt. The first step in managing debt is to acknowledge its existence and understand its terms. Create a debt tracker that lists all your outstanding debts, including balances, interest rates, and minimum payments.

Prioritize Debt Paydown. Develop a debt paydown plan that prioritizes debts with the highest interest rates. Consider using the avalanche or snowball method to accelerate your debt repayment.

Seek Support When Needed. If you are struggling to manage your debt, don't hesitate to seek help from a financial advisor or credit counselor. They can provide guidance and support to help you get back on track.

10. Money Coaching: Taking Control of Your Financial Destiny

The system is rigged; so many other industries (financial services, credit cards, retail) benefit when we make financial missteps or choices that don’t align with our best interest.

Become Your Own Advocate. Financial adulting is an ongoing process that requires self-awareness, discipline, and a willingness to learn. Embrace the role of your own money coach and take control of your financial destiny.

Regular Money Parties. Schedule regular money parties to review your financial progress, update your plans, and celebrate your successes. These dedicated sessions will help you stay on track and maintain momentum.

Seek Support and Accountability. Surround yourself with a supportive network of friends, family, or financial professionals who can provide encouragement and accountability. Sharing your goals and progress with others can help you stay motivated and committed.

Last updated: March 28, 2025