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Financial Freedom – the ultimate goal. We all want it, right? Never having to live paycheck to paycheck again, being able to afford almost anything you desire, having a surplus of savings, and more importantly – GETTING RID OF DEBT! If any of those options made your ears perk then you’re in luck because today I’m sharing with you some of the tips from Paris Woods, the author of the book “The Black Girl’s Guide to Financial Freedom” on ways you can live a life free of debt by making a few simple but powerful financial adjustments.
So today we are focusing on financial freedom and a few tips on how to start on the road to financial freedom. In “The Black Girl’s Guide to Financial Freedom”, Paris Woods discusses ways to build wealth, retire early, and live the life of your dreams; and the tips she provide are so common sense – but majority of us do not follow these simple rules! But before we jump into a few of her awesome tips, let’s learn a little more about Dr. Woods.
Author Spotlight
From LinkedIn
“Dr. Paris Woods is an award-winning education leader, social entrepreneur, and advocate for financial empowerment, dedicated to driving positive change in education and economic mobility.” With a focus on education, she “currently serves as Chief Program Officer for StriveTogether, a national movement with a clear purpose of helping every child succeed in school and in life from cradle to career, regardless of race, ethnicity, zip code or circumstance.” With over 70,000 copies sold, her book, The Black Girl’s Guide to Financial Freedom, has empowered so many by reminding us of a few common sense strategies to stay debt free and stay on top of our finances. So let’s get into it…
#1 – Do Your Best to Avoid Purchasing Things on Credit
The author starts the book off by bringing light to the trap of living in debt and emphasizes that “if we are going to reach financial freedom, we must see this trap for what it is and avoid the temptation to purchase things on credit”. And let’s face it, it’s so easy to put almost EVERYTHING on credit these days – clothes, furniture, electronics, groceries, etc. using different types of buy now, pay later credit services such as Afterpay, Klarna, Affirm, etc. At first glance, the benefits of owning a credit card seems innocent enough. Buy what you want now, and pay for it over time and build your credit history while doing it.
However, credit card companies are aware that we are humans, and humans make mistakes – plenty of mistakes in relation to owning a credit card. They offer customers appealing sign-up bonuses and perks and make you feel oh so special once you get approved for one. But what happens when you make your first purchase? If you’re not financially knowledgeable, you began making more and more purchases with a mindset of “I’ll have time to pay it off”. And then BAM – an emergency happens – and that’s when debt begins to peep around the corner. Your “want” purchases begin to transform into your “need” purchases, and that hefty balance you’ve created is now taking longer than expected to pay down.
Woods suggests instead of relying on credit cards to make ends meet, focus on building an emergency fund. “An emergency fund is a pool of money you save up in case something unexpected happens.” The money you save for an emergency fund can be placed into an interest-bearing account which allows you to make money on top of your savings. Woods states “before you do anything else financially, you need to start putting aside money for emergencies,” because let’s face it, emergencies can happen at the most inconvenient times, but at least we can be prepared for them.
She also provides tips if you decide to go the route of using credit:
- Be sure to keep your purchases under 30% of the credit limit or less.
- Never spend more than you can afford. Use your card for predictable monthly bills such as a cell phone bill.
- Be sure to pay your bill each month on time (I recommend before time, actually right before your statement date.)
#2 – Don’t Get Sucked Into the Student Loan Debt Community. It’s Not Fun!
Education in the United States costs more than living honestly; however, there are some ways you can avoid getting sucked into the downward spiral of student loan debt. When I first started college, my mindset was ALL WRONG! I was only focused on the “free” refund checks every semester. I looked at it as some quick money that I could use towards other goals I had such as getting a place, a car, clothes, etc. Totally UNFOCUSED!
And now I’m paying for it.
But you don’t have to take the route I took. Actually – PLEASE don’t take the route I took. Luckily, Dr. Woods provides some great advice on how to get a college degree without going into debt. One advice she gives is to look into merit-based and need-based scholarships.
Merit-Based Scholarships
Merit-based scholarships are awarded based on a student’s achievements, skills, talents, and potential. These achievements can be academic, athletic, artistic, or related to other specific criteria. To be rewarded with a merit-based scholarship, you will have to meet at least one of the following criteria:
- Academic performance (e.g., GPA, test scores)
- Extracurricular activities (e.g., leadership roles, community service)
- Athletic performance
- Artistic talent (e.g., music, art, drama)
- Special skills or accomplishments
Some examples of merit-based scholarships are:
- National Merit Scholarship Program:
Awarded based on PSAT/NMSQT scores. This program recognizes top-performing high school students in the U.S. - Gates Millennium Scholars Program:
Targets minority students with strong academic records. - Rhodes Scholarship:
Prestigious international scholarship for graduate study at the University of Oxford. It is b
ased on academic excellence, leadership, and character.
- Presidential Scholars Program:
Honors outstanding high school seniors in the U.S. based on academic success, artistic excellence, essays, school evaluations, and transcripts.
Need-Based Scholarships
Need-based scholarships are awarded based on a student’s financial need. These scholarships aim to make higher education accessible to students who may not be able to afford it otherwise. In order to qualify for a need-based scholarship, you will need to provide one or more of the following criteria:
- Family income and financial situation
- FAFSA (Free Application for Federal Student Aid) information
- Cost of attendance at the desired institution
- Other financial obligations and circumstances
Below are some examples of need-based scholarships:
- Pell Grant:
Federal grant for low-income undergraduate students. The a
mount awarded depends on financial need, cost of attendance, and enrollment status. - Federal Supplemental Educational Opportunity Grant (FSEOG):
For undergraduates with exceptional financial need.
Priority is given to Pell Grant recipients with the lowest expected family contributions. - Institutional Need-Based Scholarships:
Many colleges and universities offer their own need-based scholarships. E
xamples include Harvard University’s financial aid program, which covers full tuition for students from families earning below a certain threshold.
- Jack Kent Cooke Foundation College Scholarship Program:
For high-achieving high school seniors with financial need. Provides up to $40,000 per year to cover tuition, living expenses, books, and other fees.
Differences Between Merit-Based and Need-Based Scholarships
| Merit-Based | Need-Based |
|---|---|
| Based on achievements and talents | Based on financial need |
| Reward excellence and potential | Ensure access to education regardless of financial situation |
| Often require transcripts, recommendation letters, proof of achievements, and sometimes essays | Require financial information, typically provided through FAFSA or similar forms |
| Available from a variety of sources including private organizations, colleges, and government programs | Often provided by federal and state governments, colleges, and some private organizations focused on educational equity |
Understanding the differences between these types of scholarships can help students and their families better navigate the financial aid process and maximize the resources available to support their educational goals.
So be sure to look into merit-based and need-based scholarships. Avoid getting a loan at all costs. The refund money feels good temporarily considering it’s gone as fast as it comes. If you have to get a loan, use ONLY what you need to cover your tuition and room and board (for those of you living on campus).
Remember to use ONLY what you need!
College Pay Plan
Another way you can avoid tapping into student loans is by checking to see if your school offers a pay plan for your tuition. A college pay plan for tuition can provide significant benefits by making education expenses more manageable through structured, interest-free payments. It can help you budget effectively, reduce the need for loans, and avoid late fees, ultimately contributing to a more accessible and less stressful college financing experience.
Tuition Repayment Options
If you’re like me and have already created a mountain out of a mole hill, you can look into repayment options, see if your employer offers a tuition repayment plan, or even look into some of the loan forgiveness programs that the government is offering. And for any of you seeking to enroll in graduate school, Dr. Woods suggests, “If you’re interested in graduate school, pursue a marketable degree and research ways to get your degree paid for partially or in full by outside entities.”
Marketable degrees are those that lead to careers in high-demand fields, often with strong earning potential and good job stability. Many outside entities, including corporations, government agencies, and non-profit organizations, offer scholarships, grants, and sponsorships to help students pursue these degrees.
Here are a few examples of some marketable degrees you can pursue:
- Engineering
- Computer Science and Information Technology
- Healthcare and Medicine
- Business and Finance
- Education
- STEM (Science, Technology, Engineering, and Mathematics)
- Law
- Environmental Science and Sustainability
- Public Policy and Administration
- Arts & Humanities
These marketable degrees can significantly reduce the financial burden on you while also preparing you for successful careers in high-demand fields.
#3 – Budget More; Spend Less
In “The Black Girl’s Guide to Financial Freedom” the author highlights how important it is to create a budget and actually stick to your budget. Creating a budget won’t do you any good if you fail to stick to it.
“If you’re serious about becoming financially free, don’t deviate from your budget,” Dr. Woods emphasizes. And to keep from deviating from your budget, you need to first figure out how much is enough for you to be able to live comfortably making sure bills and needs are met. One suggestion I highlighted when reading the book is:
Don’t get caught up in the idea of wanting more and never learning to appreciate having enough.
Here are some tips Dr. Woods recommends to help you budget more than you spend:
Create an Envelope System – an envelope system may seem useless but it is so worth it. You are slower to spend paper money than digital money. Separating your dollars into categories of spending is a sure way to stick to your budget. It’s hard to break a $100 bill let alone a $20 bill.
Use a Separate Bank Account for Spending – using a separate banking account for spending keeps you from tapping into your budgeted funds as well as your savings account. Add funds to a prepaid card that you will only use for spending if you have to. You can also have your direct deposits split to go into different accounts so that some of your pay can fund your spending account and the rest can go to your bill account and savings account.
Stick to Your Budget!! – This is the most important tip of them all. Sticking to your budget ensures you don’t overspend and will allow you to save much more in the future.
Dr. Woods also provides some ideal ways to help you spend less so that you can save more:
- Cut housing costs – meal prep, limit utility usage by cutting lights off in vacant rooms and using God’s natural light, unplug items from the wall when they’re not in use
- Find free ways to be entertained – walks in the park, girls/boys night in, Netflix and chill (appropriately, of course), picnic, board games, etc.
- Pay car insurance premiums every six months instead of monthly – you can save at least a month’s bill by paying your premium in six-month increments instead of monthly. That’s one less bill you have to worry about for a few months!
- Cut cable and get a subscription service – I think majority of us are doing this already, but just in case you’re not – cut the cable and sign up for one or two subscription services. Cable only plays reruns anyway. You can also invest in an antenna to receive your local channels (for those of us who like to pay attention to the weather).
- Get prepaid cellular services instead of a contracted plan – I’ve been using the Verizon prepaid service for over 10 years – and I only pay $45 monthly. I get 15GB of data (which I never use because who doesn’t have wifi) and I’m not hit with any contract fees.
These are just a few simple moderations you can make in order to budget wisely and spend less.
I hope you enjoyed the article. If you have any book recommendations, feel free to leave me a message by scrolling to the bottom of the home page and leaving your information/message there. To find out more money-saving tips, pick up Dr. Woods’ book “The Black Girl’s Guide to Financial Freedom here. You can also learn more about Dr. Woods by clicking here.