If you’re among the millions of Americans who are feeling financially stretched, you’re not alone. Fortunately, you can take steps to get yourself in a more financially-stable position, no matter what your bank account looks like at the moment.
JPMorgan Chase recently sponsored a powerful and actionable conversation at The Riveter about optimizing your finances during COVID-19, the impact COVID-19 has had on women, and tips for preparing for financial emergencies. Maria Pollina, the Head of Financial Health Digital Solutions for JPMorgan Chase, was joined by Tosh Ernest, the Head of Wealth for Advancing Black Pathways at JPMorgan Chase, and Marsha Barnes, a sought-after financial social worker, commentator, and founder of the Finance Bar, who’s also a Go Banking Rate best money expert and a national ambassador for FICO. Their conversation was moderated by The Riveter’s VP of Content, Laura Brounstein.
All panelists agreed it’s essential for people, particularly women, to better understand and improve their finances through education and perseverance, with the ultimate goal of empowerment. The more knowledgeable you are about your finances and the more of a safety net you’ve created for yourself, the more choices, and thus, power, you have. Critical to this is recognizing the need to uplift Black communities and create Black wealth. JPMorgan Chase and Co. and The Finance Bar utilize a variety of creative ways to share information and listen for ways to better meet the needs of those they serve.
As one example of a service developed with their customers in mind, Ernest highlighted a JPMorgan Chase program especially for Black business founders, called Advancing Black Entrepreneurs. It covers critical topics like caring for yourself, your customers, and your employees physically and mentally while managing your small business finances, and pivoting your business strategies to respond to things around you, like the COVID-19 pandemic.
On the personal level, while many people may hear terms like wealth or finance and think they don’t apply to them because they don’t earn a lot of money, Pollina stressed that the company’s mission is to help its customers achieve financial health. She said, “We define financial health as a person’s ability to do three key things:
- Manage your day-to-day finances. That means paying your bills on time and spending less than your income.
- Have enough saved to withstand emergencies, especially like the one we’re going through now.
- Plan for your long-term goals by managing your creditworthiness and investing and building your wealth over time.”
According to Pollina, several vital factors shape observations related to financial health. She noted that women typically earn and save less money. She also observed that women are over-represented in the healthcare industry, so they’re working on the pandemic’s front lines. Women also typically manage childcare and eldercare for their families, which can add to financial and other stress. “One of the fears and the things that we’re watching is, will that result in women exiting the job market, and what will that mean in the long term as they decide to return back, in terms of what it may do to the existing gender income gap, and will that grow,” she said. On the other hand, because of the recent shifts toward the potential for remote work, there could be an increase in women entering the workforce because of the flexibility it may offer.
Pollina added that savings rates reached an all-time high in April 2020. “We just saw an announcement this morning that the economy shrunk by almost 10% this past quarter, and that’s because of the impact that we’ve seen in income and reduced spending,” she said.
Of course, those savings aren’t necessarily equitable. As Ernest noted later in the conversation, “One in five Black Americans do not own a bank account. That’s 21% of the population. Compare this to 4% of white Americans. That’s a huge gap. One in five. To get over this generational wealth gap, education is power.”
So, how make sure you’re setting yourself up for success? Whether you have a cushion of several months’ expenses saved or are only now realizing the need to build savings for yourself, the panelists offered several tips to get you started, no matter where you are on the path to financial health.
- Talk about money with your partner and family. Marsha Barnes emphasized how important it is to work together as a team with a partner if you have one. By doing so, she says, couples can focus on the “need to haves” instead of the “nice to haves,” which can help build cash reserves faster.
- It’s okay to start small. While 3-6 months’ of cash reserves is typically the standard guideline, Pollina acknowledged it could be overwhelming to think about saving that much money. “Just start with what you can. Even a dollar a day will add up over time. Then, be smart about saving the money when it comes in. Tax refund season just came by. If you got a tax refund, that’s a good chunk of money that you can save toward your cash reserve,” she said. Barnes recommended starting with automatic withdrawals to a savings account.
- Understand your expenses and disposable income. Barnes said it’s essential to think about what your actual, necessary costs are. “You will be surprised what your disposable income is when you take away some of the things that we’re just accustomed to doing that are luxuries to us,” she said. Added Ernest, “I want to encourage everyone to keep [your credit score] 700 plus. Your buying power when you have a great credit score is insurmountable. Be smart about your spending. Don’t spend it when you don’t need it. Invest in what truly matters … start small, start slow, but start now.”
- Know your credit score. Ernest said, “If financial wealth matters to you, you have to measure it. Your credit score lets you know how you’re doing.” Barnes added, “When you think about credit, you get access to certain things. It gives you buying power. Certain homes, certain neighborhoods. When there’s any type of disparity, that means there’s a certain segment of people already locked out. I would say that now is a perfect time to be looking at your credit to make sure that everything on your credit report belongs to you.”
- Use the free tools and resources available to you. Barnes noted that FICO’s Score a Better Future program includes a free credit report and information about upcoming programs where participants can talk to credit experts and credit counselors. Pollina pointed out that JPMorgan Chase and Co. offers Chase Credit Journey, an online tool that also provides a credit score check that doesn’t impact your credit, while giving tips for raising your score. CurrencyConversations.com and Chase Chats can help users on the path to more significant savings, too. JPMorgan Chase & Co.’s You Invest tool helps people invest with small dollar amounts. And don’t forget about your banker; use the Chase app’s Chase Meeting Scheduler to set up a meeting with a banker, whether you’re a Chase customer or not. A banker can help you determine your short- and long-term goals and how to reach them.
All panelists were unanimous in the importance of having savings, no matter who you are. “At The Finance Bar, one belief that we have is that financial access and financial literacy and financial education shouldn’t be for a certain set of people that make a certain level of income. It should be for all of us,” said Barnes.
With the insight and advice of Barnes, Ernest, and Pollina, it’s easy to see how even small steps, like starting a savings account, taking a realistic look at necessary expenses, and taking more advantage of available — and free! — banking and investment tools, can reap rewards that multiply over time.
Aniesia Williams is a proven thought-leader, journalist, and digital beast. Aniesia possesses over a decade of experience across digital & experiential marketing, branding, communications, and publicity. She has worked tirelessly without losing her vision or vibrancy to reflect the voices of brands and businesses that required a courageous leader to catapult them to success. She works in the trenches of Fortune 500 companies and top nonprofits to build brands from being uncertain to undeniable. She contributes and edits insightful content that influences millions of readers, via the top media outlets with a global distribution like Business Insider and Black Enterprise. She rightfully takes her seat at the table to speak on the needs for diversity and inclusion in the advertising industry. And while most consider these tasks as a part of her job description as Partner, Chief Experience Officer with Solve Innovation Group, Ms. Williams has consistently shown that this is her personal and professional plight. Her efforts exceed any nine-to-five obligations. She has made it her life’s work.