AllBright

In 2020, for every £1 of wealth in a white British household, a black Caribbean household had 20p. For author and founder of Black Girl Finance Selina Flavius, wealth disparity is at the heart of her mission. “Before I created the platform”, she recalls, “I did research about the gender and ethnicity pay gap, and it really lit a fire in me.” If knowledge is power, then Selina is all about sharing that power around. We spoke to the finance expert about how culture and religion impact your money beliefs, the financial lessons you learn without even realising it, and the 50/30/20 rule - which we’ll certainly be adopting!

1. Culture and religion teach you money values

I do think sometimes we talk about our money habits in complete isolation to the early money lessons that we learn. There's research that shows that our money habits start forming as early as the age as seven. It could be pocket money that you get every week, or it could be a gift, some monetary gift for your birthday and communion. Every time you interact with your parents in that respect, it's teaching you a lesson.

I grew up in a black Caribbean household. Also, I grew up in a Catholic household. So I went to church quite a bit and was really pious when it came to money. One day when I was maybe eight, I asked my mom outright, "How much do you earn?", and she gave me the dagger look. She gave me a look that said, "We do not talk about this." So I guess I learnt money's not something that you talk about. It's also something that you maybe shouldn't aspire to, and I do think that's kind of from a Christian perspective, being really humble and pious when it comes to what you want to earn, and (that it’s) rude to talk about.

2. Ignoring debt won’t make it go away

You may get into debt at first and it's quite manageable, and then all of a sudden, if you're not managing it, if you're not thinking about a strategy to pay it back, you're just getting into more and more debt as you go along in life... and that was the scenario for me. But it was a real rock bottom for me because I was a mother, so I had this young person depending on me. I had got to the stage where I was ignoring letters, ignoring phone calls from my creditors, just really burying my head in the sand about it, probably because I didn't know how to deal with it.

Rock bottom for me was really panicking, and really thinking about potentially digging into a savings account that I'd set up for my son, and it just felt awful to feel that way, to get to that stage. It was a real emotional low point for me. I had to change.

3. Your self-talk around money really matters

I used to always tell myself, "I'm not good with money. I'm not good at maths. I can't afford it," or, "I'm never going to be able to afford it. I'm broke. I'm always waiting for payday," which are just common things and phrases that we throw out. Where it has a real negative impact is if those things that we're telling ourselves, stop us from actually noticing the reality.

I didn't actually stop to examine the numbers, do the actual figures, and when I do financial coaching with women, it's important for me to take them through a process of actually looking at the actual numbers. Because you could be really beating yourself up, telling yourself how terrible you are with money, when actually the numbers will prove otherwise. Or it could be that, okay, you're not handling your money in the best way possible, but there are things that you can do to make things better.

When I finally sat down and looked at the numbers, I realised that actually, I'm not as terrible as I thought I was, because I was making sure that I was paying my essential bills. So my mortgage was always paid. There was always food on the table for my son. There was always electricity and gas. I wasn't at the stage whereby I was about to lose something but, equally, I felt terrible about how I was handling my money. So I think it's really important to challenge the negative self-talk and that's the way of overcoming it: "Really, is this true? You've got to such and such an age and you're okay."

4. You have to speak positivity into your finances

I never tell myself I'm broke. If I need to figure out how I'm going to afford something, it's exactly that; it's figuring out how to be able to do something rather than not being able to afford it. I think it's really empowering. I'm all about speaking empowerment into your finances, because, for me, it's worked. You have to speak positivity into your finances, just like you have to speak positivity into all areas of your life.

5. The simple 50/30/20 budgeting strategy

In terms of budgeting, a really simple budgeting strategy that I talk about in the book is the 50/30/20 strategy. 50% of your income goes towards your essential bills, and obviously it's not always possible to do that, particularly if you live in major cities, where it's more expensive. But, as best as possible, trying to keep what you're spending on your essential bills manageable for you. So 50% goes there. 30% goes on wants. When it comes to budgeting, I think sometimes there's this thought that you have to restrict all the fun; you can't have any fun, you can't pay for that holiday, you just have to save for your retirement. But, no, we need to have some fun right now, otherwise we won't stay motivated to stick to any plan. So 30% goes on fun; so that's your Netflix budget or your gym membership, or your presents for family, or eating out budget, date night, whatever. And then that final 20% goes towards savings. It's worth ensuring that you've got some money put aside for an emergency fund, or siphoning some money off for the future, whether that's in a pension or in an ISA.

6. When it comes to saving, start small

I really wanted to save. I really wanted to invest. So what I sacrificed for a small period of time was getting the train into work. I used to commute via bus, get up really early, but it enabled me to start saving and start investing. I'd say start with what you can afford. Don't feel the pressure to suddenly start saving £500 a month if you've never saved a day in your life. Just start with a small amount that you're happy with, and gradually it just builds up, because it's very motivating if you've gone from not having any savings to suddenly having some savings, and having the pressure off.

7. Consider investing rather than just saving

I was looking at the Bank of England interest rate changes over the years. I went back to 1980 and the interest rate was 9.8%, which was reflected in bank accounts back then. So, to save and to be diligent, your reward was that high interest rate. We just don't live in that time anymore, we really don't. At the moment, it's like 0.1%. So you'd be lucky if you get a savings account with an interest rate of 2% or 3%. So, number one, that's why we should invest.

Also, the cost of living. Inflation's always increasing, the things that you can get with your money over time is eroded due to inflation. So we need to make sure that whatever income we earn, whatever savings we put aside, we also are bearing in mind the cost of inflation, and investing allows us to combat inflation, basically, and the lack of interest rates. So that's why it's important.

8. Talking about wage disparity is vital

We feel like we can't make a difference, but we definitely can. The gender pay gap is not fair and the government should be doing so much more than just talking about it, and companies should be doing so much more than just talking about it. The secrecy around pay needs to be removed so that everyone just gets paid equally. I don't feel like I should be paid less because I'm a woman or because I'm from a different background than the majority of the U.K. There are things that we can do, and that's why I talk about it.

9. The gender and ethnicity pay gap inspired Black Girl Finance

Before I created the platform, I did research about just the gender and ethnicity pay gap, and it really lit a fire in me, and it's why I like to talk about it often because I think sometimes we're not aware of what's happening, and we're not aware of the actual impact of it as well. For me, talking about it means that people are aware of it, and then also talking about ways that we can combat it.

10. Financial literacy changes women’s lives

If I can speak to someone and encourage them, "Okay. When was the last time you asked for a pay rise? Maybe it's something to think about," and give them the tools to be able to do that, and then not only that, to then show them or talk about investing, and try and make it seem as doable as possible and as easy to do as possible - then I feel like I'm having a real impact and change on women's lives. Because why should we have less pensions wealth? Why? We work just as hard as anybody else.

Disclaimer

AllBright cannot guarantee that all of the information provided in this video or article is accurate. Use the information provided on our website at your own risk. If you wish to make an investment you should seek independent financial advice before doing so, and ensure that you have carried out your own research on the product or company that you are investing in. Any advice provided is not tailored to anyone’s individual situation, as each individual is in a different situation. AllBright does not accept any liability whatsoever for any action taken or losses incurred as a result of the information provided on our site.