We are NerdWallet’s Smart Money Podcast, where we answer real-world money questions.

This episode is about Black women’s emotional and financial choices.

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Our take

People start saving money for retirement at various stages of their lives. It can be easier to save for your children’s future if you are able to accumulate enough money before having children. Saving early is not something that everyone can do, especially Black mothers.

Sometimes they may have to decide between saving for their children or saving for retirement. This can be a hard decision to make, and it can lead to anger and guilt. Moms who are struggling to make ends meet may feel overwhelmed and not have enough money to invest.

One way to get past these emotions is to shift your money mindset towards one of abundance. It is possible to start small, $10-20 per week, and build wealth over time.

Remember to put on your oxygen mask before you start to help your children achieve financial success. After you have reached financial security, you might decide to save small amounts each month for your children in a 529 college savings plan.

Learn more about financial planning at NerdWallet:

Episode transcript

Sean Pyles: We are the NerdWallet Smart Money Podcast. Here we answer personal finance questions and help people feel smarter about how they spend their money. Sean Pyles is my name. This episode is part of our series “The Color of Wealth”, where Elizabeth Ayoola, personal finance Nerd, talks to money experts about how Black women can achieve wealth. She also discusses the difficulties they face, and how to manage motherhood and money goals. Elizabeth, welcome back to Smart Money.

Elizabeth Ayoola (Hello Sean): Hello, everybody listening. We are grateful for your warm introduction.

Sean Pyles: Yes. Sean Pyles: Of course.

Elizabeth Ayoola – This episode will feature Dasha Kennedy, founder of The Broke Black Girl, an award-winning financial advocacy organization. Dasha founded the group in 2017. So Dasha Kennedy is a financial activist, millennial financial coach and has provided financial education to over 70,000 African American women. Her primary goal is to bridge the wealth gap. I think she has done an outstanding job.

Sean Pyles: That’s very cool. Sean Pyles: Very cool.

Elizabeth Ayoola – We will be discussing the emotional difficulties that Black mothers face in managing their money. This can also include how to balance tradeoffs such as saving for retirement and building your children’s financial lives.

Sean Pyles: That’s great. It’s great. I can’t wait for the results. Let me know how it goes.

Elizabeth Ayoola: Awesome. Welcome to Smart Money Dasha. What are you doing now?

Dasha Kennedy: It’s fine. Thank you for having me. My health is my top priority this year. I am so focused on my financial goals that my health is neglected. I don’t want to lose my health, but I do want to be able to enjoy my money.

Elizabeth Ayoola – That’s a word. It was also one of my goals this year to slow down. If you are healthy, you may be able to do more of what you love, but it is really important to be present. That’s why I agree with you.

Dasha Kennedy: Yeah, I agree.

Elizabeth Ayoola (OK): Let’s start by you telling me about your journey towards building wealth or saving for retirement. It could have started after you became a mother or before.

Dasha Kennedy: When I was 19, I started in the financial industry. I was intrigued when a woman mentioned a 401(k) and that I hadn’t heard of it before. So I was curious. For the first time I heard women and men in their 30s, and some even in their 20s, say that this was money that they had saved for retirement. This was what I knew I wanted to do. I began to invest in a 401(k). I didn’t know what I was doing and I wasn’t serious until I had children. I also knew I didn’t want to be a financial burden for them when I retired.

Elizabeth Ayoola: Yes. Yes, I totally understand what you mean about not learning about retirement savings and how it works until you get older. I didn’t really receive any financial education and thought that I would be wealthy when I turned 40. Then I’d have enough money to retire. So I had no idea how to plan for retirement, or how to save money. That’s why I agree with you. Then you answered the question I was about to ask you. Which is what changed for you and made it possible for you to start saving for retirement? Your children are a great reminder. Can you tell me about the financial changes that took place for you, and how you began to save money?

Dasha Kennedy: It was a long journey for me. At 19, I discovered that I was pregnant with my first baby. It wasn’t until five to six years later that I began to take this seriously. As you can see, as a young mother, I couldn’t understand the concept of taking money out of my check and putting it aside later, when I had to live on that money. This was the reality that I faced, as many Black women face.

Many people don’t have the money to save for retirement. It’s too little to put away later. However, I realized that even if my son was older, you still need to save something for retirement. It didn’t matter if it was $10 or $20. I had to change my mindset from “OK, yes I need every penny to care for him now” to “Something will be better than nothing because time will pass anyway.” He will get older and I will get older so I need to do something. I began by testing the waters, with $20 here, $10 there, and it started adding up.

Elizabeth Ayoola (Non, I totally agree with you). This was the same thing I had when I first started investing. It was like “Well, I don’t want to save $20 or $30.” I will wait until I have at least a thousand dollars or $5,000 to save. You said that once you see the power of compound interest, it will be easier to understand how little can make a difference when investing. It’s a long-term investment game, right?

Dasha Kennedy: Yeah.

Elizabeth Ayoola. I was interested in learning more about your feelings. Many Black women can relate to the feeling of not having enough money and being the sole provider for the family. There are many other situations that Black women face. Can you please tell me more about what emotions you felt when you said, “I’m going start putting money away, and this will mean that I might not be able to spend as much on, I don’t know, an outing to the kids, or extra shoes, or whatever else?” How did you handle those feelings?

Dasha Kennedy: Yes. I was mad. This was something I didn’t want to do. I felt like I was already working a lot. I didn’t like my job. I felt that life had placed me in a situation where I had to do what was required and not what I wanted. It was not my choice. It was my family. Many of the same things they dealt with over generations were just as difficult for a Black family. I was furious. I didn’t want to lose a portion of my check that might be needed down the road. In my neighborhood and my household, it was pretty much like you deal with what’s in your face and then you face whatever comes down the pipe.

Although it wasn’t much about preparing for the future I found that I was more concerned with my son’s future than I was with the present. My son will be able do many of the things I love, even though I might not be able. Unfortunately, my mom couldn’t stop me from doing some things, and my mom couldn’t prevent others from happening to her. It’s possible to break the cycle. If I can do it with just $20 per week, it will be worth it.

Elizabeth Ayoola : This makes me want to find out how you got started. Which strategies did you use? What strategies did you use to save for your children and yourself?

Dasha Kennedy: Yes, I think it was me at the beginning. I didn’t know that saving money for my child was possible until I was 30. This just goes to show how much time is wasted due to lack of knowledge and lack of awareness. Now that I have a better understanding of how to invest for retirement, someone suggested a 529 plan. The 529 plan was what sparked the conversation. Because I didn’t know it was possible, my mind went wild. When you stop and think, I am 30 years old, but I had my first child at 20. That’s a total of 10 years I missed because I didn’t have the right information. It was me at first, but it eventually became my two children.

Elizabeth Ayoola says: I feel the same way. Only this year, I opened a 529 account for my son. Although I remember feeling similar to you, I also felt like my son was born with no savings. I took all the money from his birthday, christening, and other events and put it in an account. I had no idea about investing and it is still there, depreciating due to inflation. If I knew what I now know, I would have put it in an investment account such as a 529 or custodial account.

Dasha Kennedy: Yes. Because of that, I believe it’s important to have these conversations. I often think about how I could have been saving for my son’s education and investing for his retirement for the past 10 years.

Elizabeth Ayoola: Right. Even though I understand how it must feel, I think I’m still thinking, “Oh, I wasted ten years.” But, you don’t know what you don’t know. It’s still admirable that you thought to put some money aside for yourself. As you mentioned, I am not a burden to my son as I get older. This is because I believe in the Black community and in other communities of colour, this is a common theme. If you have money, or you want to build wealth then you might not be able to get as far as you would like because you are expected to take care of your grandparents, aunties, or siblings who aren’t doing well. This can really hinder your ability to build wealth. Even though you might have lost those 10 years of savings for your son, it can still help him get ahead. He doesn’t have the worry about you taking care financially when you are older. That’s still a win for me.

Dasha Kennedy: Yeah, I agree. Ich stimme völlig.

Elizabeth Ayoola. You talked about your anger at the realization that you needed to save money for retirement. Then you discussed the downsides to this. How much do you think this has to do with your family and your relationship with money? Although you mentioned anger, are there other emotions? How much does this relate to your growing relationship with money?

Dasha Kennedy: Yes, anger was the knee-jerk response. I am happy to say that once I had gotten past that, I felt that I knew enough so that I could do better and was eager to see how my son’s future will turn out. My son does not have to have the same money relationship as me. It is the same one that my mom had and the same one that her mom had. It doesn’t have to be repeated.

Elizabeth Ayoola (Yes, I agree with you). It’s also interesting because I was just talking to my mom about this. She is very financially savvy and was able to retire earlier than expected. All that great stuff was what she did when she started investing. I was like “Why didn’t you tell me about this stuff?” You can see that I have learned everything you’ve ever asked. She paused and said, “Well, I never asked.” I was like, “Well, you never asked me what I didn’t know.” She’s like, “Well you know what, she’s sorry.” She said, “OK, this is what I do, and that is what I do.” All that being said, why is it that sometimes, with Black families, I don’t know how it works for other families as well that we don’t have these conversations around money and that even though they may have some financial information, it’s not passed on to the children?

Dasha Kennedy: Money can sometimes seem like a taboo topic. Sometimes our parents feel that we are too young to have those conversations. It’s not something they do inadvertently. It’s something that is passed down through generations. My grandma was 60 years old when I believe. Just think back 60 years ago about the country’s climate and what my grandma endured. Sometimes, I believe that not speaking about money is a sign to protect the elderly Black community members. They can’t be taken from what they don’t have. It is something we don’t talk much about. It’s a normal thing, I believe.

It was not normal to talk about it. My mom didn’t ask me about money or bills. I was 35 when I asked my mom “Mom, what is the budget?” What do you earn? It would seem so unusual. My boys and I talk about it all the time in our household. They know how much I earn, how much rent they pay, and how much they spend on items. Because I have made it a household norm, we will be discussing it. It doesn’t always mean that we don’t have the conversations because our children don’t want them to learn. Sometimes, we just don’t know. It can be difficult for people to admit that their family has done this for generations. On the surface, you believe it works. But it doesn’t. ”

It’s hard to accept that. My mom did her best. She was a businesswoman. She was a wonderful mom and took great care of us. Her thought was, “Why do I need to talk to her about money management?” She can see how I handle money. She has a roof over her heads, so she’s okay. It was this setup that I believed it was, whereas when I became a parent and became an adult, I was completely clueless. I had no idea how to save money, invest, budget, pay off debts, or credit. I was totally clueless. Sometimes we forget that time will fly by. My son is 14. He’ll be 18 years old in four years. At that time, the financial world will be all around him regarding credit and debt. Therefore, I need to ensure he is prepared so he doesn’t waste 10 more years just because I didn’t know.

Elizabeth Ayoola says: I agree with that. I wanted to also ask you from your words. I believe money mindsets are very important. I believe it is possible for you to change from “I want all my paycheck to go on what I want” to “I want all my paycheck to go on what I want.” It is often a belief that drives our financial decisions and money habits. What was your money mindset prior to now? And then, what type of shift in your money mindset made it possible for you to start saving for retirement?

Dasha Kennedy: Yes. In the beginning, I believed that if I worked 40 hours per week, then I would be spending my money on things I enjoy. Because I worked hard for it, I want it all now. It was easy for me. When I receive my check, it’s mine to do whatever I want with it. I don’t think about the future. I am not planning for the future. I am more focused on the present. My mindset now is to invest in the future me. It’s taking care right now that I can do what I want and can also relax and coast.

Future Dasha is secure, future Dasha can be relaxed about. My mind is now like this: “Yes, I’ll give money up today because I know I’m giving it Dasha tomorrow.” Your biggest asset to driving your investments is time. It’s best to start saving money early, with small amounts. Then be consistent. When you look at how far it will take you, you’ll be able to say “OK, this was built from $20 of my paycheck.” Now my outlook has changed completely. When I think about the future, and think about getting older, I feel excited. Because I know I will be fine, I am excited about retiring and getting older.

Elizabeth Ayoola says: I have always said that I cannot wait to be in my 40s. Although I am 34, I feel like I cannot wait for my 40s. They’re going be the 30s of my life, and I want to live my best life. A lot of it has to do with me making smarter financial decisions now. Once I realized how much it could do over 10 to 20 or 30 years, I knew I had to invest now and not wait for tomorrow. That makes all the difference.

Dasha Kennedy: Yeah. Yes, my son is 14. I need to be more assertive in conversations. I can’t say “OK, son, I think you should probably put $20 to your side,” as you suggested. Yes, I must sit down and show how powerful $20 can be. Let’s take a look at a graphic, some calculators, and some numbers to give you an idea of how investing for the future looks.

Elizabeth Ayoola: Absolutely. You work with many Black mothers. Can you please tell me if there are any common themes you notice in your emotional responses regarding saving for the future? Do you see any patterns?

Dasha Kennedy: Some of it reminds me of when I first started investing or saving for the future. Many feel overwhelmed by this idea, as it takes away from what little they may already have. This is what I shared on my Instagram the other day. The average monthly salary of a Black woman in America is $3,000. When you consider that this average monthly salary is $3,000., rent and mortgage are required. If you have children, this is added to the $3,000 per month for school and care fees. Now you are saying “OK, yes, I need to put some of this to the side for future.” This is a huge statement, especially considering the amount of information that has been presented to us online and offline.

You said it exactly. We often think that you need to spend thousands of dollars or $5,000 to make a real difference. What I see most is that many Black women feel overwhelmed by the idea. This is why I focus on starting small, and only small amounts. It’s easier to manage. It’s actually possible if you think, “OK, I can sacrifice $20 per week.” To get used to investing, I could cut down on a weekly expense or drop my subscription. It is overwhelming at first, but once we have a conversation and I explain what investing is and how it can be done, I believe more women will open up to it.

Elizabeth Ayoola: Yes, absolutely. When I started, I was definitely angry and overwhelmed. I think it made me realize that my money mindset was a major source of my overwhelm. It was clear that I was living in a state of scarcity. I didn’t believe I could have enough money, more than enough, enough to have my son, my family, and still have enough time for me and my family. It was time to shift my mindset about money. I had to stop thinking “I can’t have enough.” I do have enough and have the resources and ability to make enough money. This really helped me to shift my investing path.

Dasha Kennedy: Yes, I agree. It’s crucial to have more discussions about investing, especially when we think about the Black community, and other factors such as income disparities and the racial wealth gap. Sometimes, we need to have conversations about investing that are different from what is trending online. When I look at a lot of investing content online you will see that “Oh, if your monthly investment is a thousand dollars, by the end of your retirement you will have a close to a million.” It is like a horrible pause for me when I see this. I can only imagine how many people who are low-income and Black and have to deal with so many other disparities in money and investing will see it and feel like they won’t be able to do it. Why not? ”

It can be very dangerous when such conversations take the initiative. It is important to keep in mind how much we can accomplish and how little changes and amount can make a big difference for our future. Even if someone could only retire with a few hundred thousand dollars, it would still be a lot more than what most people are retiring with. To sum it all, I believe that something is better than nothing. When you create an investment strategy that suits your needs and maximizes your income, that’s 10 times better than not doing anything.

Elizabeth Ayoola: Yes, yes, yes, yes, yes, yes. Let me ask you one more thing. Do you have any tips or resources that you can share with Black moms, or any moms who are just feeling the same emotions as us?

Dasha Kennedy: First, do your research. With all the resources online at your fingertips, it is easy to research any topic. What is a 529 Account? How can I open a 529 account? These are important things. You can make the most of what you have, and know that even a small amount can go a long way. When I think about Black women, particularly Black mothers, I can tell that they want to be free. We don’t want work forever, I know. Even if I only invest a small amount per month, it’s because I want to give Dasha a break. I want her to have the time to relax. I want her to relax and be able enjoy all of her hard work.

Elizabeth Ayoola says: Dasha, those are some great, outstanding tips. We are grateful. This is all for this episode. We are so grateful to Dasha for sharing your wisdom, experiences as a parent, and financial knowledge with us today.

Dasha Kennedy: Of course. I am grateful for your time.

Elizabeth Ayoola: To share your thoughts on how to budget, pay off debt, or manage finances as a parent, shoot us an email at [email protected] Also visit nerdwallet.com/podcast for more info on this episode. Remember to rate, review, and subscribe whenever you receive this podcast.

Here’s a brief disclaimer. We are not investment or financial advisors. This geeky information is for general education and entertainment purposes only and may not be applicable to your particular circumstances.

Sean Pyles and I produced this episode. Liz Weston edited the episode and KaelyMonahan mixed our audio. A big thank-you to the NerdWallet Copy Desk for all their assistance.