Cash-flow Management in the Black Community

© Kelly Sikkema

Overview and Perspective

Structural racism has always been and will continue to be the principal obstruction towards the advancement of African Americans all over the country. This type of discrimination leads to the creation of unequal opportunities in all facets of life. Structural racism reflects diverse ways, including unjust and prejudicial employment, inequality in the criminal justice system, contrariety in health institutes, and the education system. Discrimination is most profound in rural areas of the United States, especially in the south. However, blacks throughout America are vulnerable to this impediment. As these issues dig deep into the black economy of the United States, I believe that cash-flow management in the black community is paramount.

Racism in the labor market has always prevailed, and business cycle movements are more prone to affect African Americans than any other group. In times of recessions, they are the most likely to be laid-off first. At the same time, during hiring in the recovery period, they are given the least priority.

To overcome all these challenges, America’s black community needs to plan and manage their cash-flows effectively. This way, in times of crisis, they will have sufficient savings to support them and their family or even their community.

COVID-19 Pandemic

Recently, the COVID-19 pandemic has adversely affected the economy of the whole world. The Black community has suffered the most from its wave, especially in the United States. The positive point is that this downturn is far less than the one faced in 2008 and 2009.

There are projections that companies are expected to confront a decline of about 33% in revenue in 2020, compared to 2019. So, an individual’s income will also face the same dip. In order to overcome the effects of downfall, one approach is not to panic, but to start focusing on making a new, more reliable cash flow management plan that suits the current situation.

Cash-flow Management Plan

In order to manage the cash flow effectively, a sound resource management plan is required: a system that constructively manages money every month. It should ensure that spending coincides with present-day priorities and future targets. Personal cash-flow management encompasses recognizing the relationship and timing among your hard-earned dollars, expenses, and savings.

Steps to Manage Cash-flow Effectively

Few steps to manage cash-flow effectively are explained below.

  1. Focus the efforts on maintaining and even increasing cash inflows

Adapt to online work

Wherever our focus goes, our energy flows in the same direction. So, focus on how to improve cash inflows. Make efforts in areas where you have expertise. Start marketing your skills. If you have time, start an online work setup. This is especially helpful for those who lost their jobs or businesses due to the pandemic.

Identify what the demands in this current scenario are. Adopt technology and try fulfilling those demands. Assist in filling the gaps in the market to become successful. Position your cash flow positively. Instead of reducing the margin for services you provide, try finding out some other better way to satisfy your customers. Reducing margins may lead to declines in cash resources, and so, you may not be able to manage your cash-flow soundly.

Work virtually from home.

COVID-19 has led all communities, including the black community, who remained on the job, to work from home. Creating a positive environment at home can help to focus all efforts constructively. Be proactive with the customers and community you are dealing with. This will help get a better idea of what’s going on in the market and the challenges that everyone else is facing—having an early insight of challenges will help create effective plans on a timely basis.

  1. Scrutinize your spending

Don’t lose sight of your finances. Once you get a picture of where and how the money is coming, start reviewing your payables and expenses. Identify to whom and why you are paying. Can you reduce the liability in some way? Are there chances of making the terms of payment lenient? The government has created low-interest rate schemes on pending loans and announced cash reliefs to those who lost jobs to grant relief. Get yourself enrolled in some of these schemes that you may qualify for.

Fixed costs

Fixed expenses are predictable. It includes rent, bills, over which we have some control. Shrinking fixed expenses would require a structural change, like moving to a low-cost area. However, such steps are recommended only when it is the last possible option.

Discretionary Expenses

Greater control can be exerted on these variable expenses. Shop only when it’s necessary and choose discounted stores. Postpone all vacation trips and unnecessary costs until your budget gets in a better flow. The choices you make have a significant impact on the flow of your cash.


Savings create the possibility of capturing and securing wealth. The more nuanced choices you select, the more the wealth and security are derived. Struggle to identify ways to cut expenses, both official and personal. Identify them and evaluate if they conflict in any way with your savings. Make sure your costs do not exceed the profit figure.

After getting an overview of all your income and expenses, identify the new profit and savings individuals can make during the crisis.

  1. Receivables and terms

Make efforts to reduce the receivables. If you have debtors, try giving them polite reminders regularly to not suffer from bad debt. Tell them that with the onset of the COVID-19 pandemic, you plan to firm up your cash flow and that their early payment will be beneficial in this regard. This may sound a bit hard, but hey, your money better be in your hands.

  1. Map up your cash-flow

Failure to estimate and assess will lead to an inability to manage. Initiate, for each pay period, with a spreadsheet or a blank sheet of paper. Record and comprehend the pay period requirements. This may include expenses like mortgage, rent, utilities, and food. Don’t feel discouraged if the cash-flow in the beginning ends up with the negative figure. The key is to understand how you are spending your money and correcting how to make it favorable in the future.

The intention behind the cash-flow management plan is to determine the net cash-flow. Positive net cash-flow reflects that your earning is more than your spending, and that there is some savings leftover from that period. On the other hand, a negative net cash-flow depicts more expenditure than the money you brought in. Identify what’s essential and what’s luxury to manage the cash-flow picture effectively. Utilizing personal cash-flow statements will make you more aware of your spending habits and net worth. It will lead you well on your way towards better financial security.

Benefits of Personal Cash-flow Management

Advantages that personal cash-flow management can provide to the black community are

  • Unveil them the areas where spending can be narrowed.
  • Help in setting reliable financial goals.
  • Assist in re-prioritizing their financial choices.
  • Aid in figuring out what significant life changes they can take to succeed.
  • Enable them to future-proof their life.
  • Safeguard them from situations of running out-of-cash.
  • Even in times of crisis, they are at peace of mind.
  • Help them to grow in their career and life.


Keeping in mind the racism and discrimination confronted by African Americans, it is strongly recommended to create a backup plan. A sound and financially secure cash-flow management plan at the individual level to support themselves. Black people make up about 13.4% of the total U.S population. Demographics estimate this population to be over 40 million, which is not a figure we should ignore. African Americans, who are financially stable, need to establish institutions and schemes to support their community.

About the Author

Blessed E. Ngoe
Lover, brother, uncle, father and friend.

1 Comment on "Cash-flow Management in the Black Community"

  1. Alain Eboa NEMBI | 07/09/2020 at 8:53 am | Reply

    Structural racial discrimination will also have a great effect on the American democracy with time

Drop a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: