Moving Forward: Building Your Financial Safety Net

Having a financial safety net in place can ensure that you're protected when a financial emergency arises.

By Norrell Edwards — January 23, 2023


Moving Forward: Building Your Financial Safety Net

When I first began teaching undergraduate students as part of my doctoral training, I would often assign a few articles from the Atlantic to explain racial inequality and the wealth gap. It blows my mind how relevant "Why so Many Minority Millennials Can't Get Ahead" still feels nearly 10 years later.

This article discussed how millennials of color spent money on basic needs and supporting their family instead of building assets. While their White peers were still bankrolled by parents (from gifts ranging from small cash infusions to cars and mortgage down payments), students of color must often rely on their own means while facing pay and promotion disparities. In my early 20s, I witnessed several friends of color struggle with months of prolonged unemployment despite having both college degrees and work experience. While so much more awareness has been brought to these racial inequities-the reality is that students of color must think strategically about building wealth. They-we do not have the luxury of f'ing around and finding out. Even though my mother could not afford to send me to college, it had not occurred to me that I did not have a financial safety net until my mid and late 20s. I realized I had to build my own.

Do Your Research

I came of age right as the 2008-2009 financial recession hit. This sounds foolish now, but I had not considered that our economy or world could worsen. Yet, it has. I know that it is overwhelming. Like that saying goes from Of Mice and Men: "the best-laid plans of mice and men often go awry." While that can be disconcerting, we should keep laying plans. I'm here to tell you that you can do it; don't let the fear of making mistakes paralyze you. When you realize the difficulty ahead, it can feel easier to acquiesce to defeat. Why bother trying when the system is rigged anyway? You're smarter than you think and never know when and where you might get an unexpected opportunity or win. So, take a deep breath and conduct diligent research on developing investments and assets.

When I was 23, I agreed to pay $180 monthly to a life insurance plan. I did that for about four years up until it was unsustainable. I ended up closing the account and withdrawing the money early-only receiving about half of what I put in. I had largely selected this life insurance company because a friend of a friend worked there. I wanted him to be my financial advisor. He was for about a year, up until he left that company. Now, I think about how I could have used that money more wisely and invested it differently. I recently went toa financial workshop where the financial advisor said she didn't recommend life insurance. Man, I wish she could have let 23-year-old Norrell know that!

Too often, when I was younger, I would go with the first path that seemed promising. Now I recognize the utility and necessity of doing your research and picking a direction that has the best payoff. You always need to get multiple opinions and advice. It can be difficult to know where to turn for advice when you come from a small family that has not historically had strength in finance, investment, or anything like that.

The internet, from YouTube to TikTok, offers far more resources than ten years ago. Still, you can't always trust what you hear on the internet. You have to vet your sources. You should consider reaching out to school advisors to ask who might offer financial planning advice at this school. Can you go to financial aid or Human Resources? Is there a business professor who might know something? Not to say those resources are the "end all be all," but you want to garner as much expert advice from trusted sources. Honestly, you want to gather insight from sources you can hold accountable. Hopefully, your college or university offers some trusted sources.

I'm still figuring these things out myself. If I could offer sage advice to a younger self, I would say do your due diligence in this area. It will pay off, literally.

Decision Fatigue and Rebounding from Mistakes

In my college years and early 20s, I knew to do this level of research and analysis for a paper or even apartment searching, but I had not considered that it was necessary and fundamental across all aspects of my life. Truth be told, after making so many decisions about daily life from family, friends, and career—decision fatigue can set in before you can tackle long-term financial planning. Decision fatigue is "mental exhaustion after making several decisions;" your ability to make strong decisions can often wane as your exhaustion increases. We face more and more complex decisions every day. It's helpful to understand the areas where you struggle to put in the energy and effort. Think about what you might trade out or who you might say no to in order to give energy to financial planning.

Recognizing the difficulties, you might face while making these decisions (and the shame that might come with it) is a natural and necessary p art of this process. After my failed life insurance experience, I was put off by the idea of putting my money anywhere other than my checking account. Frankly, as a struggling grad student—I didn't think I could afford it anyway. Again, that initial failure and hit to my confidence caused me to further avoid this weak area (finances). I shouldn't have.

We all struggle to balance everything on our plates. Inevitably some balls will drop. But you can pick them up again.

Norrell Edwards

Norrell Edwards

Norrell Edwards is a scholar, educator, and communications consultant for non-profit organizations. Her employment experience and research interests place her work at the nexus of global Black identity, cultural memory, and social justice. Norrell graduated with a BA in English Literature from Hunter’s College followed by a PhD from the University of Maryland, College Park in 20th and 21st Century Black Diaspora Literature.
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