Financial Advice I Would Give to My 22-year Old Self
Managing money can be scary, frustrating, and so mysterious; one..Continue Reading
A s a kid, I thought my family was involved in some top secret, C14 classified, Dominican organization. I eavesdropped on their grown up conversations and heard them talk about dropping money off to La Sociedad. Who and what was La Sociedad? Why was my family giving them money?
Luckily, their activities weren’t as sinister as I had imagined. I learned that my very resourceful kinsfolk were participating in a lending circle. It’s a century’s old savings system started in West Africa.
What is a lending circle, a.k.a. sou sou, cesta, tanda, sociedad?
Urban Dictionary a lending circle is:
“A savings arrangement where a group of people each pool an equal amount of money for a period time (month, two weeks, etc) and after that time is up, one person in the group gets all that money. They keep doing this till everyone gets their turn and receives that full lump sum at least once.
It’s not a pyramid scheme, no one loses as long as everyone’s trustworthy and puts in their share. It’s just a way to hang on to money by putting tying it up into something else temporary. This is popular with 1st-gen Carribbeans, South Americans, Africans, and maybe someother people. Just a way to save money up if you can’t get a small savings account, aren’t in a credit union, or don’t want Tha Man all up in your business.”
Reasons why you should consider starting a lending circle?
– If you need help saving money for a big ticket item such a dream vacation, car, or apartment.
– If you need to pay off debt or need funds to start a business.
– If you want to improve your credit.
– If you want to get your finances in order, a lending circle can act as an accountability group to help you reach your financial goals.
Does it work?
For this article, I consulted my mom who has participated in different sou sou’s over many years. She has, with success, been able to finance many things with the money, including my first trip to D.R. in 2003.
Is it all roses and champagne? No, of course not! You are dealing with money and people- issues are expected. But, it’s been successful for so many people over hundreds of years, it has got to be worth a try with your bestest pals.