Hugh Broman explains how to develop a healthy attitude about your finances
Hugh Broman and George Y. Pearson discuss the importance of saving and investing and that it can be learned by anyone.
Hugh Broman discusses the importance of investing to achieve long-term financial comfort.
EITBM - Education - January 16, 2023 - Originally filmed in February of 2005.
Saving and investing is essential for financial health because they help individuals build wealth over time. Savings provide financial protection and allow individuals to set aside money for short-term and long-term goals, such as an emergency fund or retirement. On the other hand, investing will enable individuals to earn a higher return on their savings by putting their money into assets they can appreciate, such as stocks or real estate. Investing can also help individuals build wealth and achieve financial security in retirement. Individuals can have a well-rounded approach to planning and executing their financial goals by having a mix of savings and investments.
There are several reasons why many of us may not be taught about healthy financial habit development early in life. One reason is that historically, we have faced systemic barriers to economic mobility and wealth accumulation, such as discrimination in the housing market, job market, and banking system. Past discrimination and associated poverty have led to a legacy of financial disparities between African Americans and other groups, with African Americans having significantly less wealth on average than white Americans.
Another reason is that financial education is only sometimes a priority in many African American communities and may not be emphasized in schools or at home. Moreover, cultural and historical factors can also play a role, with some African American communities distrusting financial institutions or lacking knowledge about how to access financial services and products.
Several core habits can help individuals work toward financial stability and comfort:
By developing these habits and making them a regular part of their financial routine, individuals can work towards achieving financial stability and comfort over time.
Saving and investing is essential for financial health because they help individuals build wealth over time. Savings provide financial protection and allow individuals to set aside money for short-term and long-term goals, such as an emergency fund or retirement. On the other hand, investing will enable individuals to earn a higher return on their savings by putting their money into assets they can appreciate, such as stocks or real estate. Investing can also help individuals build wealth and achieve financial security in retirement. Individuals can have a well-rounded approach to planning and executing their financial goals by having a mix of savings and investments.
There are several reasons why many of us may not be taught about healthy financial habit development early in life. One reason is that historically, we have faced systemic barriers to economic mobility and wealth accumulation, such as discrimination in the housing market, job market, and banking system. Past discrimination and associated poverty have led to a legacy of financial disparities between African Americans and other groups, with African Americans having significantly less wealth on average than white Americans.
Another reason is that financial education is only sometimes a priority in many African American communities and may not be emphasized in schools or at home. Moreover, cultural and historical factors can also play a role, with some African American communities distrusting financial institutions or lacking knowledge about how to access financial services and products.
Several core habits can help individuals work toward financial stability and comfort:
- Creating a budget: This helps individuals understand how much money they have coming in and going out and where they can cut back on expenses to save more.
- Saving regularly: Setting aside a portion of income into a savings account, whether a small amount or a more significant percentage, can help build an emergency fund and provide a cushion for unexpected expenses.
- Investing for the long-term: Putting money into assets that have the potential to appreciate, such as stocks, can help individuals build wealth over time.
- Paying off debt: High-interest debt, such as credit card debt, can be a significant obstacle to achieving financial stability. Prioritizing paying off debt can help reduce the interest paid over time and free up money for other financial goals.
- Continual learning and education: Staying informed about personal finances and the economy can help individuals make better financial decisions and achieve their goals.
- Automating savings and investment: Automating savings and investment can make it easier to save and regularly invest by moving money from a checking account to a savings account or investment account.
- Having insurance: Health insurance, life insurance, and property insurance can provide financial protection in case of unexpected events.
By developing these habits and making them a regular part of their financial routine, individuals can work towards achieving financial stability and comfort over time.