The cost of living is high and increasing by the day! And for those paychecks? They’re not even close to keeping pace, putting us further behind financially with each passing second.
Millennials have it really tough. Those who chose to go to college and graduate are exiting school in debt and entering a ravaged job market, followed by a slew of online testimonials of massive layoffs nationwide. What your degree was worth, depending on the specialty you went to school for, may not be of value. Additionally, many may be working at a low-wage job or are in a career where the raises (if any) can’t keep up with inflation or, worse, they remain stagnant.
That American Dream… is just a dream, and Black millennials have it the worst of all. They continue to fall further behind white millennials in building wealth for their families and falling further behind what previous Black generations amassed in wealth.
Why inflation matters
Black Americans face a disproportionate impact from inflation. According to the latest Bureau of Labor Statistics release, the current U.S. inflation rate is 3.4%. The rate of inflation was up 0.3% in December 2023. As prices increase, what you can buy now will lessen over time, and being able to keep up with the pace of it requires you to sustain the purchasing power of your dollars. It’s a major reason why investing your money is important. Inflation impacts your basic quality of life.
It affects government spending and programs, taxes, and more. Reports show that a typical Black family has $1,500 in liquid savings, while white families have more than five times that amount. The typical Black family also does not have enough savings to avoid costly borrowing or missed payments when unexpected events happen, which makes them especially vulnerable to inflation volatility.
Furthermore, it is reasonable that Black Americans endure the greatest brunt of inflation due to their disproportionate representation in lower-income groups. In the United States in 2020, Asians had the highest median household income, at $94,903. In comparison, non-Hispanic whites made up $74,912, Hispanics (of any race) $55,321, and Blacks $45,870.
Personal struggles of Black families
For Ayo Jeremiah-Akin, the rising living costs pushed him to make a major decision: to move his family to Mexico. Jeremiah, a Houston real estate entrepreneur, flies to and from Cancun to visit family and run his business. Not only did he feel that it was cost-efficient for his children to attend school, but the healthcare was also cheaper, and his Airbnb business was growing.
“I promised myself that when I turned 40 this year, I’d want to retire. I want to work for myself,” he said. “The signs for me to make the move were lingering for years. The pandemic, U.S politics, the socioeconomic nonsense was too much for me.”
His parents, who are Nigerian immigrants, have been in the U.S. for 30 years and are struggling to retire and are “forced to conform to a broken system.” Now, he hustles to ensure his parents are well cared for. For Jeremiah to keep up with the pace of inflation, he had to make a few sacrifices.
“Outside of moving to Mexico, I had to get rid of my dream car and opted for a family van because it wasn’t sustainable. We didn’t eat out as much; we’re shopping on Temu and Alibaba to buy things for the kids because it’s cheaper, and we’re sharing streaming services with family members just to survive in this economy,” he said.”
Albert Okagbue is a certified public accountant who once worked for Deloitte during the 2008 recession. He made a great salary, but he noticed his first raise was “about 2%” when it should have been higher. By year two, he was already disillusioned because he wanted to solve problems for his community rather than for major companies. That led him to leave the firm in 2011 to work for another company while building on his own.
“Deloitte had expectations about what you spent your time on. If I wanted to build my tax business and create other income streams for myself in this economy, I had to leave,” he said. “I make way more than I made at that time now, but I don’t have to worry about non-compete.”
Okagbue said that for many people, the expectation was to earn a degree and get a few years of work experience, and then the return on investment would pay off. Unfortunately, that’s not the reality.
“COVID created staffing shortages, let’s not forget that. People had to get flexible schedules, retention bonuses, and job hopping,” he said. “When companies tighten their belts, people are not prepared or layoffs, or they don’t have the cushion needed to survive.”
Strategies to thrive
One suggestion Okagbue hopes other millennials should consider is being okay with living with family members until you are financially stable.
“There is this stigma around living with parents as adults. He said that wanting to be independent takes precedence over being able to comfortably afford a home. “People should live together because housing costs are going up.”
He also mentioned the importance of learning home economics, budgeting, and downsizing when necessary.
Jeremiah said being connected to the right resources, setting up retirement plans, starting investing your money to make passive income, investing in real estate, or monetizing hobbies you are passionate about are some ways he’s been able to thrive in this economy.
“We need to start making money in our sleep,” he said. “Earned income isn’t the only way. Collaborate with people in your community to get those ideas off the ground.”
