When I asked you to address the issue of how your relationship with money sucks and what to do about it the key there was the determination and awareness that yes, a relationship with money can suck and how one deals with that discovery is a unique experience for each woman. We have control of that situation. We are in the driver’s seat.
However, there are certain things that we as women cannot control and the most important thing that affects our personal financial well-being are external factors referred to as the economic environment.
What is the Economic Environment?
The glossary definition per Market Business News: The economic environment refers to all the economic factors that affect commercial and consumer behavior. The economic environment consists of all the external factors in the immediate marketplace and the broader economy. These factors can influence a business, i.e., how it operates and how successful it might become.
For the purposes of this discussion, we are concerned with external factors that affect the economy as a whole on a large scale. This is referred to as macroeconomics.
The following are examples of macroeconomics:
- · Employment/unemployment
- · Income
- · Inflation
- · Interest rates
- · Tax rates
- · Currency exchange rate
- · Saving rates
- · Consumer confidence levels
- · Recessions
As you can see, all nine items above mentioned affect our buying habits. This influence could wreck consumer confidence. There is one particular topic on the list of nine that is a hot button at the moment: inflation.
What is Inflation?
Demand for goods increases. This causes prices to skyrocket but our paycheck stays flat. In turn, this causes our purchasing power to decline, and that eats into the value of our money. We get less bang for our buck. So, what you could buy for $100 in 2021 may cost you $120 when inflation decides to rear its ugly head.
Here’s a quick helpful video that explains inflation.
Fed Chair Jerome Powell claimed during the most recent meeting that inflation is under control. If he’s not concerned about it neither should I but that doesn’t mean I should have tunnel vision.
Let’s not Forget about Public Policy
Per Wikipedia, Public policy is a course of action created and/or enacted, typically by a government, in response to public, real-world problems. Beyond this broad definition, public policy has been conceptualized in a variety of ways.
A popular way of understanding and engaging in public policy is through a series of stages known as “the policy cycle”. The characterization of particular stages can vary, but a basic sequence is: agenda setting – formulation – legitimation – implementation – evaluation.
An example of public policy is the Affordable Care Act aka Obama Care.
Why is all this Important?
What I would like to do is dissect public policy findings that affect black women and policies that we must know about for us to determine how to handle these unforeseen issues head-on. Why? For one, the articles gloss over the meat and potatoes of the findings. It acts more like a pull quote rather than a teaching moment.
Besides, what usually happens anyway? We see a sensational headline it stays in our thought bubble for a second or two. Poof. Then we are off to the races in search of the next sensational headline.
Where does this Leave us?
Here’s the thing, all the above-mentioned issues are out of our control but we should not shade them. How should we address itthis?
How about we create a discussion about them and devise a plan of action to steer clear of the event of any type of financial shock.
If you live in a hurricane zone what happens every year? The news issues a warning. That warning leads to preparation. That same attention should be placed on our personal financial well-being because anything can happen and did happen.
Pandemic 2020, anyone? What else needs to be said about that one. It changed our way of life temporarily.
In the beginning, the news was dire. To hear about the financial struggle of everyday Americans and the constant lightbulb moments in regards to having an emergency fund. All played out on a loop like a never-ending movie. Not a day goes by when I don’t pinch myself as a reminder about the current state of things.
It’s a year later things and things are still topsy turvy. The unemployment numbers reported in March revealed that 10 million people remain jobless. We still don’t know what will happen when the country opens back up 100% but I’m hopeful that we will weather this storm.