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Delayed Gratification the Key to Financial Responsibility

A recent Temple University study found that the key difference between people with consumer debt and those without, everything else being equal, was that the latter had mastered delayed gratification and how to wait for long-term benefits. In laymen’s terms: It’s the decision to put some things on layaway to keep household money available and savings untouched. In the world of wealth equity, the gap between many communities of color and white families, may lean heaviest on this lack of impulse control.

And while many young people speaking with the Informer during the 2018 Congressional Black Caucus’ Annual Legislative Conference in September expressed a desire to save but a lack of money to save, they also recognized that what they did spend could easily be counted as wasteful.

For instance, one young lady said she spent an average of $15 a day — every day — on Starbucks lattes. When the tally for a month of lattes totaled more than $400, she gasped at the reality of having surrendered $5,040 away on beverages in the run of a year.

“Cutting those drinks from large to small, making one trip a day instead of three, or setting it aside as a weekend treat only, could add most of that money into a savings account, an investment or a more feasible way of paying for college tuition than student loans,” financial planner Malcolm Jolly, told The Informer. “That’s just coffee; can you imagine how much money the average person spends ‘willy-nilly’ on a continuous basis? Financial responsibility means stopping yourself from haphazardly spending.”

A Nielsen report, Black Impact: Consumer Categories Where African Americans Move Markets, released in February 2018 adds dollars and cents clarity to Jolly’s sentiments.

African Americans make up 14 percent of the U.S. population, Nielsen said, but has outsized influence over spending on essential items such as personal soap and bath needs ($573 million), feminine hygiene products ($54 million) and men’s toiletries ($61 million). Nielsen research also shows Black consumers spent $810 million on bottled water (15 percent of overall spending) and $587 million on refrigerated drinks (17 percent of overall spending). Luxury, nonessential products such as women’s fragrances ($151 million of a $679 million industry total), watches and timepieces ($60 million of $385 million in overall spending) and even children’s cologne ($4 million out of $27 million) also play well to an audience that’s keen on image and self-care.

While this may spell success to various corporations and ensure manufacturers meet their bottom line each year, it does little to build personal or community wealth.

Retired banker Delores Portsmouth told the Informer African Americans must retrain themselves and then teach their children to resist the urge to make impulse purchases that actually rob their households of the ability to grow financially.

“We are sometimes emotional shoppers, and so your husband or boss hurts your feelings, so you go to the shopping mall and buy shoes or jewelry to make yourself feel better, or you get a tax refund on Thursday and before nightfall on Sunday, the money is spent,” Portsmouth said. “When you gain stock of yourself, you have spent money that could have been invested or put away. You see we used to know that if your heel on your shoe breaks, you take it to a cobbler – they’re still out there – and get it repaired, you don’t invest in an entire new pair shoes. You chose not to spend that money, even though you had it, because you understood that one of your kids may need something, or an unexpected bill may arise.”

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