Mymoney.Gov talks about the five essential building blocks of money management. The My-money⁽¹⁾ website can improve your money survival skills in general and is particularly important to low-income households.

The five areas discussed are common sense approaches to a tremendously difficult problem facing people. How do you survive when a  U.S. Census Report on Income and Poverty in the United States states that the 2014 median household income of African Americans is $35,398⁽²⁾ (See Figure 1 on page 5).  Do decisions need to be made now to prevent more troubles later?

Following the my-money guidelines are important but an attitude change is also necessary. Placing money in a savings account may mean preparing your meals and not eating out for months. Entertainment with friends at home is fun and less expensive than the club life. You need to fund your 401k or IRA and add to it when raises occur.

It’s Hell to be Poor!

Why are Black Americans so poor? Brad Plummer’s Washington Post article⁽³⁾ provides useful information about the economic situation of African Americans and White Americans over the last 50 years. Jay Harold’s article on African American household incomes⁽⁴⁾ shows how far below the national average we are. How can we pull ourselves from the bottom without asking for help from friends and family?

The worry of living paycheck to paycheck can cause mental stress. Borrowing from friends and family destroys relationships in the African American community. The fact that is asking for money frequently creates a rift because the lender has often put in a financial bind themselves. Payday and title loans will put the borrower into further debt.

Improving your money management skills are essential.

The causes of this financial distress are many. The bottom line is that you must spend less and earn more. This harsh reality is sometimes lost among Black Americans. The economic injustice of the past did not force anyone to burden themselves with too much debt. There are ways to get out of debt. While the labor market at present shows little prospect of large salary increases, getting a second job is critical. Part of this additional income should be used in the five principles outlined in my-money five. These rules are listed below from the my-money website.

My Money Five