A discussion on financial literacy

We’ve made our way into the second month of the new decade. We’re all mostly in our 20s and frankly there’s no better time to start saving, investing and creating our own “wealth.”

Five to 10 years from now, life will be very different. Some of us may have kids, own multiple businesses or live in a different country. So we need to focus on how we can build now.

As a college student of color, I understand that not everyone has had access to financial literacy lessons as a kid. But, it’s important that we start now. The importance of saving in the black community is often overlooked, and sometimes we don’t understand the value of money.

Sometimes we equate money and wealth to material things such as designer handbags, shoes, tons of jewelry and fancy cars. But wealth can look different.

Wealth can be equated to owning “the block,” having multiple streams of income and ultimately creating things that can be passed down generation to generation to further them in life.

As a Caribbean American, my parents always taught me that wealth looks different to everyone. In this house, to be wealthy means to save and to learn about finances and how money works. From a young age, we were given an allowance of $5 to $10, and we had to save x amount of dollars per week. We were given the liberty to do whatever we wanted with the remaining money.

This ingrained in me how I should conduct myself as I grew older. I’m very scrupulous when it comes to spending on material things: I’ll occasionally entertain the idea of going out for dinner, doing a social activity or occasionally splurging on a pair of boots, but that’s because I can.

Ultimately, in communities of color, we’re not taught about financial literacy. We’re taught that having cash on hand means
that you are rich, aka being iced out: like rocking the newest Louboutoins, Gucci and ice on your wrist.

Let’s change the narrative. Let’s start saving, investing in ourselves and our communities so we can have real wealth and the accessories that come with it.

First, we can start by opening high yield savings accounts. A high yield savings account is a deposit account which gives you a higher annual percentage yield (APY) in comparison to the typical savings account you have at your bank.

According to Nerdwallet, “A high-yield savings account is a type of federally-insured savings account that earns rates much higher than the national average. Typical high-yield accounts can earn close to 2% APY. To compare, the national savings average is 0.09% APY.

If your money is in an account that earns a high interest rate, your balance will grow faster without any additional effort on your part. After one year, a balance of $10,000 would earn about $10 in an account with a 0.10% APY. That same balance would earn about $180 in an account with a 1.80% APY.”

Here are some of the best high yield savings accounts for college students:

1. American Express’s National Bank Personal Savings Account. AMEX offers a 1.70% annual percentage yield (return on your money). There’s no monthly or annual fee, and lastly there’s a $0 deposit to open the account.

2. Discover Bank’s Savings Account. Discover offers a 1.60% annual percentage yield (return on your money). There’s also no monthly or yearly maintenance fee, as well as a $0 deposit, which is why it’s ideal to open one. Most college students have a Discover Credit Card, which gives you cash for good grades (so, you should open a savings account with Discover).

3. Ally Bank High Yield Savings Account. Ally offers a 1.60% annual percentage yield (return on your money). There’s also no monthly or yearly maintenance fee, as well as a $0 deposit.

4. Capital One: 360 Performance Savings Account. Capital One offers a 1.70% annual percentage yield (return on your money), with no monthly or yearly fee and a $0 deposit to open.

As millenials and Gen Zers, we need to understand the importance of money and saving. Get serious about your finances and achieving wealth. Deposit $10 a month in a high yield savings account and see your return.

If you want to learn more about financial literacy, and the way to get on the road to a million, follow Better Than Half (@betterthanhalf) or Wize Media (@wize_media) on Instagram, for savings and investing tips.

We need to invest in ourselves, our community and become financially literate. There are just a few tips to push us forward, and this is one step in the right direction.