- Just ahead on "Black Issues Forum," we explore the realities of the racial wealth gap, walk through smart financial strategies for challenging times, and examine the role of nonprofits in sustaining our communities.

With stubborn inflation, stagnant wages, and job losses, we're asking how do Black North Carolinians and families navigate these uncertain times?

Make sure to join this conversation about survival, security, and the future of Black wealth coming up next.

Stay with us.

- [Announcer] Quality public television is made possible through the financial contributions of viewers like you who invite you to join them in supporting PBS NC.

[bright upbeat music] ♪ - Welcome to "Black Issues Forum."

I'm Kenia Thompson.

A popular rule of thumb for household budgeting is to tuck away 20% of your pay for savings, but how many of us are really doing that?

Studies indicate that only 41% of Americans could dip into savings for an emergency expense of $1000.

The racial wealth gap makes saving even more difficult for Black households, but there are smart strategies that can help.

Joining me today are Kimberly Winborne.

She's a certified financial education instructor and owns Kimberly Winborne, LLC.

With her we have Carlos Mims, president of Trap Financial or Insurance Group, excuse me.

Both are financial experts, community advocates, and everyday people dealing with these issues firsthand.

Welcome to the show.

- Thank you.

- Thank you.

- Of course, so the first kind of statistic that I introduced here was that most of us don't have $1000 for an emergency.

How did we get here, Kimberly?

You know, when we look at the trajectory of Black families and Black communities, and unfortunately that impacts us the most, how would you say we got here?

- I think it goes back to financial literacy.

What's being taught at the kitchen table and/or not being taught at the kitchen table.

And just unfortunately a lot of these conversations are not happening around the kitchen table of the Black family.

We've been taught to keep our finances a secret to a certain degree.

The kids don't need to know all of that, and there could be a struggle happening, but the children would never know.

That leads to a lack of knowledge and a lack of information when it comes to those foundational things that we need to do in order to be able to progress well through our lives.

And so as a result, and not to blame the mother or the father who's doing their best.

The educational system, I know when I was growing up, we didn't learn financial literacy in math class or, you know, any of the other courses.

And so there just the whole system, you know, impacts our education and what we can then therefore give out.

So it really means us taking the initiative to learn on our own, and a lot of times we just don't know where to go.

You know, I tell a lot of my clients today, make sure that your banker is like one of your best friends because as you're growing in order to try to achieve financial goals, talking with your banker, a free resource 'cause you're going there anyway, really will help you to achieve that.

But how many people trust the banks, right?

- [Kenia] And that's another question.

- My grandfather still has his money under a mattress.

- [Kenia] That's right.

- So I think it starts there, and so that's why I really, you know, I love being a certified financial education instructor because I try to make it a little softer to share these principles, you know.

We gotta save, we have to put money to the side, and that emergency fund is significant to being able to grow from there.

- Yeah, Carlos, in 2022, studies have shown that white families' average wealth was $1.4 million, while black families wealth was 211,000.

That is a huge, huge gap.

- Huge.

- Your thoughts on those numbers?

- I think it has to do a lot with where most of us come from.

We didn't have, and we get excited about getting, and in the midst of getting excited about having things, 'cause we tend, as parents that say, I want my kids to experience and have things I've never had, not realizing there's a cost for that.

And I think the focus, we lose focus on that.

We're not gonna have money always.

And this has to be a baseline of where we're gonna start.

Our counterparts always talk about generational wealth, which is what they have.

We gotta start from somewhere.

Too many times we start building wealth, but by the time it we pass on, there's nothing left.

And then if there is something left, we haven't taught our kids how to maintain that, which we have, and then they'll go out and spend it.

Mainly because, you know, the American society is about spending.

That's what capitalism is about.

You spend, and somebody's gonna supply.

And if you've never sat down and had a conversation about everything that looks good isn't good, and you need to hold on, then the expectation is, I'll spend, I'll spend.

And as parents, we're always there to catch 'em.

So they never understand the consequences of spending all their money.

Where they will hold on, and then they will transfer, we won't.

And then there's other things where they will utilize insurance.

- You Know?

- Hmm, a different choice.

- They'll have a million, $2 million policy, that when they pass away, $2 million tax-free goes to the next generation, and then it goes on from there.

- Transfer of wealth.

- We think that's a gimmick.

Whereas in reality- - It has to be a catch, right?

- Yeah, there's gotta be a catch, or we'll say, you know, I don't want nobody to make no money off of me, or, you know, crazy things like that.

- Yeah, yeah.

- So.

- Well, let me ask this question.

Is it realistic for us to say, you know, spend less and save more, given, I mean, I'll just speak for myself.

It feels like there's always something and nothing extraneous, like nothing flamboyant in my lifestyle, but, you know, going, taking the kids, you know, having them be in good programs, extracurriculars that will hopefully help them advance later on.

Even just, you know, the cost of mortgage or rent.

Is it realistic today to say spend less and save more?

- I think to your point, as far as inflation, it may not seem that way, but as far as a principle, absolutely.

You know, I think a easy way to explain this is when it comes to like weight loss.

Let's, you know, bring those two differences that are similar.

If you wanna lose weight, then you know that if you eat less and burn more calories, you lose weight, right?

But if you eat more, it's gonna be harder to lose that weight.

And so the same thing with our finances.

If we want to have something long term, we want a goal, we wanna build wealth more so than lose it, then we definitely have to use those principles.

And so that goes back to budgeting.

You gotta, you have to look at what you have coming in.

And so when inflation happens, you can adjust accordingly.

And that means sitting down with your books.

I know, me, for a long time, I was weekly sitting down balancing my checkbook and all of those things, seeing what I have.

And as a business owner for years, I would have to do this where I would have like a meeting with myself and maybe my team to say, what do we need to do different, because the prices of products are going up.

You know, so we have to do that in our households.

- And I think that's a confrontation.

A lot of people don't wanna sit with their checkbooks because the reality is I actually don't have enough money.

And so when you look at the job market and living wages, and some may argue that we're not getting paid enough to live in the societies that we live in, how do you combat that?

Like, how do you face your checkbook with that reality?

- Let me kinda answer that with this process.

I look at, one of the reason we have problems is we don't really know what our lifestyle is costing us.

- Mm.

- Mhm.

- And what I do is I look at, I said, so for those of us that went to college, there's four things that we do.

We decide where we're gonna go, how much it's gonna cost, what's the total credits I need to graduate and the curriculum to get me there.

And we make that decision before we even get on campus.

So when we get on campus, every decision is based upon the curriculum.

Because if we take an extra class, cost us more money and prolong us from graduating.

Well, the issue is once we graduate, nobody sits down and figure out what's my life is going to cost me.

So if you don't ever know what the true cost of the lifestyle that you want, then you're gonna spend everything.

Because we always operate like our money is always going to be there.

We always going to have that $125,000 salary not realizing by the time you get to 45, 50, they're talking about cutting you.

And our lifestyle is based upon that income.

But if I know what my lifestyle is, then every decision I make will be based upon, is this gonna get me closer to me owning it or is it gonna get me further?

So when times come up or inflations, I'm covered because I'm definitely living within my means and I have an objective that I'm trying to reach while I'm going through life.

And without that kind of knowhow, it's that same saying, if you don't know where you're going, any road will get you there.

And that's kind of how we do with our finances, is we really don't know where we're going.

We just know I'm making money and I feel as an adult, if I make it, I can spend it.

And spending is one of those emotion that makes you feel good.

- It does.

That's a good dopamine hit.

- Exactly.

Exactly.

- Right.

- Yeah, but people do have it.

And that's one of the things that I know it's annoying to hear, but we are not as disciplined honestly as we need to be.

- When you say we, our black communities?

- Yeah.

Our black communities.

And this is not to point a finger at black communities 'cause I actually think it's American.

Actually, we become very consumeristic.

And so what we do have to do is say, okay, while Jim and Jill over there have this, let me look at what I actually have so I can attain more for my situation.

Because you have people who are making a whole lot less but have a whole lot more saved because of discipline.

And so we have to, back to his lifestyle example.

We have to think about what we want in the future and live our lives now, but also put in there some exciting moments and times.

But do we need to go on vacation every week?

Do we need to try get our hair and our nails done every two weeks?

If we need to expand it to four weeks?

It's just things like that, that getting with your budget help you to be able to say, I can have discipline, but I can also have some fun.

- Yeah, and you bring up a good point, I think especially for now in the climate today.

While they say inflation is just kind of stubborn right now, it's not super peaking up and rising, but we do see some increase in cost of living.

And a lot of people are asking the question, do I need to be traveling right now?

Should I be buying a house right now?

I think, I won't answer the question for you.

There's a blanket statement I think before you do any of those big, major decisions.

But would you say, and open to either one of you, but Kimberly I'll pivot first to you.

Is this a good time now to be making big decisions like that?

- I think absolutely, because especially purchasing a home is a great investment, so we still have to be aware of the major, wonderful investments that actually lead to that generational wealth, legacy, things like that.

Now, we have to be smart about it.

Today, a lot of people are hopping from home to home every two years or even less sometimes.

If you're an investor, then, of course, that's your goal, then you do that, but if you're not, you really have to begin to look at, why am I purchasing this home?

What's the long-term plan, et cetera?

Traveling, absolutely, but back to the plan, like travel, but if you haven't budgeted it, then go somewhere that's within a great budget, maybe an hour or two away.

Go to the beach, try to find something that could fit within your budget.

Maybe make a plan to pay on something over the year.

I always tell people, have funds for everything, Christmas, all the big, your birthday.

My daughter just turned 16.

She's been talking about this Sweet 16 for two years, so I had a fund going for two years to be able to make her party big, so we can do a lot of the things that we wish to do, but we have to have a roadmap to get there, so yes.

- I just think money is not an issue with us.

We make money.

We spend money.

- [Kimberly] We do make money.

- The issue is, we don't understand what money can do for us.

We understand it makes us feel good when we purchase stuff, but there's times where I purchase something, two weeks later, I regret that I purchased it, but we only look in the next 48 hours.

- Right.

- We don't ever look at the next 48 years, where am I gonna be?

Because we become short-minded, and I think that to Kimberly's thought, you gotta be able to plan and put into your budget or whatever the things you have, and when I talk to my clients, your lifestyle is your lifestyle.

You decide what you wanna do, how you wanna do it, and how much of it you wanna do, and put that number in so it doesn't become a problem.

And we don't do that, because to your point earlier, a calculator does not have a button that says emotion.

- [Kimberly] Right.

- You either got it or you don't, and a lot of times, we find out we don't, and we don't want to deal with the reality that I may look successful, but I'm really broke, - Yeah.

- and that's a hard pill to swallow.

- Yeah, and I think that's what we're seeing on social media.

So let's go to our younger generation that will be making decisions for us later on, and I'm glad to see a lot of younger folks making better financial decisions.

I think it's becoming a trend now, right?

But you also see a lot of folks trying to live up to an image or a status on social media, which is causing that reach for unattainable things, but when you think about someone who's just graduated from college, they may have student loan debt.

What are the next best steps for them in creating financial stability for over the next several years?

- Yeah, I definitely recommend that financial advisement counseling that happens on campus, that sort of exit counseling, and they can get that through the loan service provider as well.

I always say to parents to begin to teach their children, especially when they're old enough to begin to understand money, they see you spending it, and that's younger and younger now, 'cause these little kids are trying to swipe mom's and dad's credit card at three years old, but as soon as they can really start understanding money, go ahead and start implanting certain seeds then, but definitely coming outta school, get that loan counseling from the financial services, the lenders that they're getting the loans from, college campus resources, but take your child to a banker, back to that.

Get with a financial advisor.

Hopefully, we have them as adults.

Hopefully at some point you have a financial advisor and if you don't, please get, you know, a financial advisor right away so that you can take your child and have that meeting with them.

And for those whose parents didn't, go yourself.

You know, you're old enough.

At 18, you have your own account.

You're able to go to a banker and say, "I wanna learn a little bit more."

Go to a financial advisor.

There are free resources online now, today.

Digital technology has advanced to, you know, have so many free opportunities, courses that people can take to build their skills.

Go to these bookstores and read.

- Resources.

Yeah.

- I'm still an advocate of reading, yeah, resources.

So just really tap into your resources.

- So, Carlos, I wanna bring in investments because day trading has been another trendy thing that you see on social media I tapped into it.

It can be very lucrative, but it can also be very dangerous.

What are some investment options or opportunities out there for folks that say, "I do have a little bit of money and I would like to grow this money a little quicker?"

- First of all, when it comes to investing, you gotta look at 10, 15, 20 years down the road.

I'm not a big day trader.

- Yeah.

- Because of the possibility of what you can lose.

- Yes.

- But when you really talk about investing, you gotta think about the stuff you use.

- Mm.

- The companies that, you know, the Coca-Colas, the paper towel company, 'cause those companies are going to be around.

- Yeah.

- You know, as much as we may not like all of what Amazon do, they're going to be around.

So when you invest, you put it in companies, one that's gonna be around and companies that pay dividends.

- Yeah.

- So we always think about buy lows, sell high, but then there's companies that pay dividends while you still own the product.

- Mm-hm.

- Own the stock.

Those are the ones you wanna reach out and figure out who pays dividends.

- Define dividends for our viewers in case they don't know.

- Dividends is when a company's making profits and they pay you.

- Okay.

- For being a stockholder of their stock.

- Mm-hm.

- And there's companies that do that.

And you're gonna do a little research, but those are the things that you want to get into is who pays me dividends?

- Mm-hm.

- I've always just thought about buy low, sell high.

- Yeah.

- But then, when you get the dividends, you wanna keep that thing forever regardless of whether it's high 'cause there's companies that's paid dividends for the past 20 years, 40 years.

But investments ought to be part of your curriculum.

- Yeah.

- When you get paid, I need to invest.

And it, and for the young folk, like I told my 19-year-old, he's working, he has his Roth.

- Mm-hm.

- So every time you get paid, you contribute to your Roth.

No one ever talked to me about that.

- Yeah.

And a lot of these employers have these- - Oh yeah.

- Programs available for their- - Yes, they do.

- For their employees.

- But if we don't know, we don't know.

- We don't know.

- And we're, we're raised to get that job.

- Mm-hm.

- And get the job, get the money, then you can do stuff.

But no one talks about, you know, a Roth, a 401k Roth.

- Yeah.

- Or a 401k.

- How does that work?

What's the benefit?

So we're already behind the eight ball.

And for many of us parents, the focus, I know my dad was education and a job.

- Mm-hm.

- That's all he ever wanted to talk about.

- Mm-hm.

- Education and a job.

And, you know, I got my feelings on education.

- Yeah.

- But, that's what I grew up with.

And to a point where I said, wait a minute, there's gotta be more to it than just that.

- Yeah.

- Mm-hm.

- And then there are also, and I know this isn't selling insurance policy or you know, investment, you know, advice here.

But there are also, you mentioned earlier, insurance policies- - Yes.

- That also benefit and pay out.

I know like a universal life plan will, if you set it up right by the time you're 60, 65, right?

- Mm-hm.

- You can probably retire and start paying yourself out, so there are wonderful benefits like that.

There are also a lot of organizations- - Mm-hm.

- That exist in communities, in our communities.

Unfortunately, and Kimberly, I know you work a lot with the nonprofit world and I think it was maybe about a month ago where we saw nonprofits kind of being a little on edge because funding was being taken federally.

And when we look at how nonprofits have sustained the Black community and other communities as well, what threat does that pose if nonprofits aren't there, aren't funded to help the community?

- Yeah.

And nonprofits are actually that sort of gap, like you just said, with some of the disparities that women, men, everybody's facing.

Nonprofits are supporting specific demographics and groups of people that need support that they wouldn't get otherwise.

And so, now, I'll be honest, nonprofits are always [chuckles] trying to figure it out.

- I mean, yes, yeah.

- You know, they're always trying to figure it out.

But specifically, you know, I'm in cohorts and groups with executive nonprofit leaders that are trying to... You know, they're like stressed out.

They've been stressed out wondering, because even if they don't get federal funding, they may get local funding that is impacted because the federal funding is funding the local funding.

- Right.

- And so, you know, say I live in Wake County, you could have a grant that runs through Wake County, but it's federally-funded.

And then all the different changes with the rules and the, you know, executive orders and all of that.

It has been, you know, a conversation that many of us are, you know, caucusing to have about what to do to move forward.

And so, we can still get private donors, you know.

I rally.

One of the things that I talked about with a couple of the executive leaders that I've been meeting with in the past year, probably more regularly, is really finding a strategy of telling the story a little greater so that we can get more private funding, private donors reaching out to foundations.

There are foundations that's not necessarily, because those are privately funded, and then they can pour into these organizations.

So, we have to come together to share this information with one another so that we can understand how we can sustain and be resilient in times like these.

- Yeah.

Carlos, if an individual sees their local organization is no longer there or they may be there, but they're not quite equipped to help, what other resources are there for folks to turn to for financial guidance?

- Well, I think what's gonna ultimately have that, well, there is church.

Some churches have financial programs in place to help 'em.

But I do believe there's gotta be a time like what we try to do is create events from a for-profit to share with the community to say, "Hey, it is not always about the money, but if I can show you how to get it, how to do it, then you can help yourself."

So, I think for-profits are gonna ultimately have to step up and say, "Hey, I gotta help the consumer that's helping me."

So it's like a handshake.

- Yeah.

- Because I just feel right now, you can't completely rely on the government.

And the other thing about the government, it's not the government's job to help you create wealth.

- [Kimberly] That's true.

- That's your job.

And you need to be able to put yourself in a position or line yourself up with nonprofits that are in the same area that you're doing.

And I think it's, for us, especially for Black businesses, we need to step up as well, and say, "How do I help my community?

Where do I sow?

What nonprofit do I need to put my money in or partner with to make sure that the message gets out to the community?"

- A couple of minutes left, Kimberly.

Again, inflation isn't too much of an issue right now.

However, we don't know where things will lead, right?

When we experienced the pandemic, we didn't expect that to happen.

And so, how can we prepare right now, today, with our current situations as they are, for potential times ahead that we may face - Yeah, so inflation is one of those things that's always gonna happen.

If we track history, economic history, it is one of those things.

It is just a condition of- - It's inevitable.

- Right.

It's inevitable.

And so I wanna echo what Carlos just said, and one of my favorite things is collaborating.

So finding, I think it's important, if you don't know where the resources are and maybe you don't have the money to pay a financial advisor right now, so you can go to these events and things where people are collaborating and coming together, financial leaders, and saying, "Hey, I do tax, I do life insurance, I do investments, I do all of these things."

And begin to educate yourself.

That's one of the things I tell everybody to do.

Educate yourself, as I just said a few minutes ago.

Get online, get with various resources.

We have social media, don't listen to all the social media and TikTok advice as it relates to finance, but it goes back to three principles.

Having long-term vision, delaying some gratification, which I know nobody wants to hear, but also there's power in compounding.

So your efforts, your habits, the things that you do are gonna compound.

It's for us to determine if those things are serving our long-term goals.

First of all, knowing our long-term goals takes sitting down, planning and talking it through.

- Yeah.

- But is it gonna serve us?

Is it gonna be for us or against us?

- Well, great information, great insight.

Hopefully our viewers feel a little hopeful with where they can start with where they are today.

And I think it's possible for all of us to have financial success.

So, Kimberly Windborn, Carlos Mims, I thank you so much for the conversation.

- Thank you.

- Thank you.

- Of course.

And I thank you for watching.

If you want more content like this, we invite you to engage with us on Instagram using the hashtag #BlackIssuesForum.

You can also find our full episodes on pbsnc.org/blackissuesforum and on the PBS Video app.

I'm Kenia Thompson.

I'll see you next time.

[dramatic music] ♪ - [Narrator] Quality public television is made possible through the financial contributions of viewers like you, who invite you to join them in supporting PBS NC.