Selina Flavius is the founder of the financial coaching platform Black Girl Finance; she created the platform to provide a safe place for black women to talk about all things personal finance – particularly budgeting, saving, and investing after feeling like she could not see herself in the existing personal finance literature and platforms available.
Flavius is also a massive advocate for equal pay in the workplace for women and people from Black, Asian and minority ethnic backgrounds, to overcome the gender and ethnicity pay gaps. She is the author of the new book Black Girl Finance: Let’s Talk Money.
In the Black Girl Finance podcast and the book, Flavius talks extensively about investing. Managing personal finances so as not to simply save money, but also to invest and grow it. The first step is to get a good handle on your personal finances.
Clearly calculating the income you have coming into your bank accounts vs expenses going out every month and noting the difference using a budget, is a great place to start says Flavius.
Here are some of her other great tips.
3 top tips for budgeting
1 – List all of your income and expenses out using your previous three months bank statements. Sometimes it can be tempting to guestimate and round up or round down the amounts we are spending. Do not do this; list everything out, so the values are clear in black and white.
2 – Clearly note down what you have leftover each month. If there is no money left over, go to work on your expenses, make notes of where you can cut back. If you have not negotiated a discount on utilities in a long time, give your providers a call.
Alternatively, think of creative ways of generating extra income. Can work provide overtime or extra shifts? Is it possible to get a second part-time job or gig economy work? Can you create extra income by renting out a spare room, renting out your driveway, selling things you no longer need on amazon or the vinted app? If there is some money left over each month, then move onto the next tips for building up savings and investing.
3 – Choose a budgeting method that works for you. Are you going to be using the 50-30-20 method or the zero-based budgeting method or a spreadsheet? There are multiple routes to a single destination; there are also multiple budgeting methods. Choose a budgeting method that suits you and your personality.
3 top tips for saving
1 – Savings should always have a purpose. Even if you are saving for the short-term – perhaps to create an emergency fund to give you a financial cushion and security. Perhaps for the medium- term – perhaps to go on a well overdue holiday next year, or to purchase a car or to save a deposit for a house. Or long -term (which is often where investing comes into play). It is hard to stay motivated to save for a rainy day; however, if you have clearly outlined the reasons for saving, it keeps you motivated.
2 – Think about the scenarios where you will need to access your savings, which will dictate where to keep your them. For example, if you had an emergency and genuinely needed to access your emergency fund savings, it’s better to keep this money in an easy to access, non-risky account, than in a stocks and shares ISA, where the money may drop in value just when you need to access it. Also, accessing the money may take a few days.
Long-term savings, ie, pensions money, may be kept in an investment vehicle such as a stocks and shares ISA, SIPP (which you can invest in stocks and shares or index funds, ETFs etc) to benefit from growth in the stock market and the power of compound interest; also, you will not need to access the money for a long time.
Medium-term savings should be kept somewhere in between, less risky, easily accessible, and somewhere accruing interest as you still want to get some growth from your money.
3 – When saving and investing, there comes the point where speaking to a financial advisor can be extremely helpful. They can advise of the best places to save, invest etc. based on your goals and if your circumstances are financially complexed.
3 top tips for investing
1 – I am a massive advocate of investing especially women investing. Studies show women are better at investing than men. However, before you start, you need to ensure all your financial ducks are in a row. For example, often it makes more sense to pay off any high-interest debts you have first because the interest being accrued on those debts, can be more than you earn from investing over the long-term. Also, remember paying down debt, and increasing savings will increase your net worth.
2 – Decide how you want to invest, some people are comfortable leaving the investing decisions to a financial adviser, others are happy to do the research and decide what to invest in themselves and invest through apps or online platforms such as vanguard, Hargreaves and Lansdowne, Freetrade, Wealthify, Nutmeg are some examples.
3 – If you do decide to invest yourself, do your research, start with an amount you can set and forget, think long term, invest little and often (google pound cost averaging) especially if you are just starting out, think diversification – it could be having a mixture of stable companies from various sectors, or various asset classes – ie, bonds, stocks and property. Also think about stable companies that are able to adapt and are futureproof, also companies that have global reach – products can be easily used and consumed anywhere.
Black Girl Finance: Let’s Talk Money by Selina Flavius, is now on Amazon.