Three days ago, Forbes released an article entitled, “A Second Stimulus Check Could Be Coming, Can the Black Community Wait?”. Now, by reading the headline only, I can see how this headline could possibly enrage and offend members of Black Community. However, if you are a member of the Black Community, I want to challenge you to view this headline with a different perspective.
Although the title of article may seem controversial, the content of the article was eye-opening and brought up some valid points. The article points out the many reasons why low-income households are in need of a second stimulus check and what consequences these households could face without the government’s assistance through this second round of stimulus checks. The article also highlights the disparity of the time it took for low-income households to receive the first stimulus check compared to white households. While the headline of the article was off-putting to many, the article actually advocates for the Black community as well as low-income households.
Now, the question is, when the Black Community receives this second round of stimulus checks, if a second round is actually approved by Congress, how should we allocate those funds to put our households and, ultimately, our community in a better position financially and for the long run. It is imperative that black households have a viable plan in place for using the stimulus checks in a manner that facilitates generational wealth over time. We suggest implementing these three recommendations:
- Obtain Life Insurance - Statistics show that African Americans are more likely to be underinsured (https://www.newyorklife.com/newsroom/african-american-life-insurance-gap-survey). Therefore, one responsible way to use the second round of stimulus checks is to purchase an adequate amount of life insurance. This will help alleviate any future financial burdens that result from the passing of household members.
- Establish A Retirement Savings - According to AARP, for every $1 of retirement wealth that African Americans have, white Americans have $7.30 (https://www.aarp.org/retirement/retirement-savings/info-2020/social-security-impact-on-minority-households.html). Retirement is one key component of having a successful financial plan. Therefore, if you don’t have a retirement plan in place, using the second round of stimulus checks to establish one is a responsible thing to do.
- Obtain Health Insurance - Since we are in the middle of a global pandemic, this recommendation as to how the second round of stimulus checks should be used is almost obvious. Statistics show that 13.6 Black Americans have no health insurance (https://www.statista.com/statistics/200970/percentage-of-americans-without-health-insurance-by-race-ethnicity/). With the number of COVID cases steadily climbing and being six months into the pandemic with no end in sight, I can’t stress the importance of obtaining health insurance enough. Now, of all times, is not the time to be uninsured.
Many will argue that low-income households can’t focus on implementing these recommendations because they are struggling to cover day-to-day expenses. However, I challenge our community to take an in-depth look at their household finances with the assistance of an accounting or finance professional who can develop a strategic plan that not only guides one through uncertain times, such as COVID-19, but also assists one in making financial decisions that could better the lives of generations to come.