Setting Financial Goals: Needs vs. Wants for the African Diaspora

You’re scrolling through Instagram, your feed filled with flashy cars, designer outfits, and exotic vacations. Your cousin back in Lagos just posted about their new iPhone 16. Meanwhile, you’re staring at your bank account, wondering how you’ll afford next month’s rent in London while still sending money home for your little sister’s school fees

Let’s get real for a minute. Managing money as part of the African diaspora isn’t just about budgeting and saving. It’s a complex dance of cultural expectations, family responsibilities, and personal aspirations. 

You’re trying to build a life in a new country while still maintaining ties to your roots. It’s like trying to keep one foot in Accra and the other in Atlanta – not exactly a comfortable split.

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Needs vs. Wants: The Great Debate

Before we dive into goal-setting, let’s clear up the confusion between needs and wants. It’s not always as black and white as you might think.

Needs: The Non-Negotiables

Needs are the essentials you can’t live without. For the average person in the diaspora, this typically includes:

• Food: We’re talking basic groceries, not daily orders from that trendy Senegalese restaurant down the street.

• Shelter: A safe place to live, whether that’s a shared flat in Paris or a small apartment in Toronto.

• Utilities: Electricity, water, gas, and yes, internet. In today’s world, internet access is crucial for work, education, and staying connected with family back home.

• Healthcare: This includes health insurance, regular check-ups, and necessary medications. Remember, you can’t send money home if you’re not healthy.

• Transportation: This could mean public transit passes in London or maintaining a reliable used car in Houston, depending on your location and job requirements.

• Basic Clothing: Enough appropriate clothing for work and daily life. Your collection of Ankara print outfits for special occasions? That’s venturing into “want” territory.

• Education: If you’re still in school or paying off student loans, this is a need. It’s an investment in your future earning potential.

Wants: The Nice-to-Haves

Wants are the things that make life more enjoyable but aren’t essential for survival. Some common wants in the diaspora community include:

• Entertainment: Netflix subscriptions, concerts, or that trip to Zanzibar you’ve been eyeing.

• Luxury Items: The latest iPhone, designer clothes, or that shiny new car your uncle keeps hinting you should buy to “show you’ve made it.”

• Dining Out: Yes, even that monthly dinner at the Ethiopian restaurant where you and your friends catch up.

• Remittances Beyond Essentials: Supporting family is important, but sending money for a cousin’s new business venture or a village development project often falls under “wants.”

• Status Symbols: The pressure to appear successful can be intense in diaspora communities. That Rolex or Louis Vuitton bag? Definitely a want.

Setting SMART Financial Goals: Your Roadmap to Prosperity

Now that we’ve sorted needs from wants, let’s talk about setting those all-important financial goals. This isn’t about vague wishes; it’s about creating a concrete plan to achieve financial success on your terms.

Step 1: Get Real With Your Finances

Before setting goals, take a hard look at your current situation:

• Income: Calculate your total monthly income after taxes.

• Expenses: Track every penny you spend for a month. Yes, including that meat pie, you grabbed on your lunch break.

• Debt: List all debts, including student loans, credit cards, or personal loans from family members.

• Savings: How much do you have saved, and where is it kept?

• Remittances: How much are you sending home, and how often?

Step 2: Prioritize Your Needs

Ensure all your needs are covered in your budget. This might mean:

• Allocating 30% of your income to rent or mortgage in expensive cities like London or New York.

• Setting aside money for health insurance, even if you’re young and healthy.

• Budgeting for nutritious groceries instead of relying on fast food.

Step 3: Set SMART Goals

When setting financial goals, make them SMART:

• Specific: Instead of “save money,” try “save £10,000 for a down payment on a house in Birmingham.”

• Measurable: “Reduce my credit card debt by £500 per month.

• Achievable: Be ambitious but realistic. Saving 80% of your income probably isn’t sustainable.

• Relevant: Make sure your goals align with your values. If supporting your family is important, include that in your financial plan.

• Time-bound: Save £5,000 for an emergency fund within 12 months.

Step 4: Categorize Your Goals

Break your goals into:

• Short-term (1 year or less): Building an emergency fund, and paying off high-interest debt.

• Medium-term (1-5 years): Saving for a down payment, starting a side business.

• Long-term (5+ years): Retirement savings, children’s education fund, buying property back home.

Step 5: Plan for (Some) Wants

Life isn’t all about deprivation. Budget for some wants, but do it smartly:

• Create a “fun fund” for entertainment and non-essential purchases.

• Save up for big purchases over time instead of using credit.

• Look for ways to enjoy life that align with your financial goals, like hosting potluck dinners instead of eating out.

Practical Tips for Achieving Your Financial Goals

• Automate Your Savings: Set up automatic transfers to your savings account on payday.

• Use Technology: Apps like Mint or YNAB can help you track spending and stick to your budget.

• Find Your Diaspora Money Crew: Connect with other Africans in your city who are serious about financial growth. Accountability partners can be game-changers.

• Invest Wisely: Look into index funds or real estate investment trusts (REITs) for long-term growth.

• Continual Education: Stay informed about personal finance. Follow experts like Bola Sol or Tiffany Aliche for advice tailored to the Black community.

• Side Hustles: Consider starting a side business that taps into your cultural knowledge, like import/export or translation services.

• Negotiate: Don’t be afraid to negotiate your salary or rates. Remember, you’re not just supporting yourself.

Conclusion: Building Your Financial Legacy

Your financial future starts now. It’s time to stop dreaming about prosperity and start actively working towards it. Who knows? In a few years, you might just be the one giving financial advice at family gatherings instead of avoiding those money conversations.

So, are you ready to set some goals and make money moves that would make your ancestors proud? Let’s get to it!

READ: Financial Advisors: A Necessity or a Luxury for Africans Abroad?

In this article, we will explore the role of financial advisors in the lives of Africans living abroad and whether the investment in professional advice is worth it.