Black Families Spend More Time Planning Leisure Activities Than Financial Future

This article originally published in West Orlando News Online.

Each year thousands of Black families from around the country attend the Tom Joyner Family Reunion during Labor Day Weekend and the Florida Classic in mid November right here in Central Florida. This proves that African-Americans can budget to save money to have a really great time with their family and friends!

In most African-American households, planning for the annual family reunion or vacation takes strict planning and budgeting.   The goal is to make sure the family has a fun and memorable event spending quality time together.  There will be enough money in the budget for a nice hotel room, air fare and local transportation.  A daily spending budget to cover extra food/snacks, souvenirs and other out-of-pocket expenses will be set aside too.  Many families start planning next year’s trip immediately after they get back from this year’s event.   They make arrangements to put money aside from almost every paycheck specifically for next year’s vacation.  They plan to make next year’s trip even bigger and better.


Statistics show that most American families spend more time planning for vacations, and other leisure/sports activities than their retirement or for the college education of their children. Even if the majority of African-American families do not plan for annual vacations, how many hours in the next few weeks will they spend on Holiday shopping?  How much time, if any, did these families spend discussing their financial future during the course of the entire year?


You know they love their families enough to make sure they have fun together.  But, how are they showing that love when they do not have a plan to replace their income or pay for their child’s education if the unthinkable happened?  If an unfortunate accident should take place that left an income earner disabled or took their life, how would the family survive without the weekly, monthly or annual income?


Everyone is probably in agreement that people want their families to have the same or better quality of life if they were not around.  Unfortunately, not many people like to sit down and plan out what happens to their families especially in the case of death.  Nevertheless, don’t most loving parents plan for the birth, graduation and wedding of their children?  So doesn’t it make sense for the parents to have plans for their own final wishes too?  People don’t have to be rich to have a basic estate plan that guarantees their family and financial goals are met after they die.


Every adult, especially those with children, also needs to have a last will and testament.  A will is a legal document that tells everyone who “you” want to get items in your estate (everything you own or specific items) and who you want to handle you final affairs.   It is also the best way to name guardians for any minor children. Take into consideration that some states like Florida, will allow the probate court to decide who gets to raise orphaned children from families without a last will and testament.  Shouldn’t it be the parents’ choice to decide who takes care of their children when they are not around?  Therefore isn’t it the parents’ responsibility to take the time to prepare in advance for every aspect of their family’s future?


Another key aspect of planning for the family’s future is income protection.  One of the least expensive methods of income protection is…life insurance.  According to the Financial Dictionary web site, the definition of life insurance is  “… in exchange for a premium, the insurance company pays a certain benefit to the survivors of the policyholder upon his/her death.  Life insurance can help defray costs of the funeral, pay off the estate’s debts, and may provide for the survivors’ (notably a widow or widower) future.”  Each family’s need for the right amount of life insurance is determined primarily by the amount of household  income that needs to be replaced, how much debt needs to be paid off  and  how many years of basic living expenses that need to be covered.


“Trends in Life Insurance Ownership” survey stated that,  “The number of Americans with individual life insurance policies is at its lowest level in 50 years, and 30% of Americans have no life insurance at all. Of the 35 million American households without life insurance, 11 million include children under 18.”


So when did budgeting for a family vacation, other leisure events or even Holiday shopping take a higher priority than protecting our loved ones financial future?  Or do most families think that the life insurance coverage at their job is all they need?


One of the benefits many people have on their job is a “group” life insurance policy that usually covers one and a half times (or more) the annual salary. For example, if the annual salary is $25,000, you would multiply that by 1.5% which would mean you had $37,500 of life insurance coverage through your job.   But the employee does not “own” this policy, the employer or parent company owns it!  When the employee leaves that job in most cases they lose that coverage.   In today’s economy with the highest rate of unemployment ever there are some questions most employees need to ask themselves (1) Am I willing to chance losing this coverage if I become a victim of the next layoff? (2)  Is the life insurance  through my job enough to cover the loss of my annual income? and (3) Is it enough to take care of my family financially until my youngest child graduates from college?


In the African-American community many families may have thought that the only insurance needed was  enough to cover funeral expenses. (or as our grandparents probably called it “burial insurance.”)  Unfortunately, far too many don’t even consider life insurance as a major need until they reach age forty or fifty years old or older.  There is a huge catch to this type of thinking. No one person knows exactly what day, date, time they are going to leave this world. Your mortgage company requires “hazard insurance” to replace their loss in case of catastrophic events. Certain states require a certain amount of insurance coverage on each automobile by law.

So if for no other reason, enough life insurance should be purchased so that your family is not left with your unpaid bills/debt and with less income to handle daily living expenses.  Think about it…life insurance is not for you…it is for the loved ones you leave behind!

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