5 Universal Money Lessons That Kwanzaa Teaches

This African-inspired celebration offers practical money tips to guide personal finance success for individuals, their families, and their larger communities.

Kwanzaa is a week-long celebration in the United States that honors African-American culture and ancestry. Dr. Maulana "Ron" Karenga introduced this African-inspired celebration of life in 1966, at the height of the Black power movement and just months before the "Long Hot Summer of 1967," when race riots ignited the shopping districts of over 150 American cities. The festival itself was a response to that racial and economic frustration. It channeled anger towards pride, by harking back to African values that every family—regardless of class or education level—could appreciate and replicate.

Kwanzaa brings together traditions from all the major religions by focusing on meaningful gift-giving and communal feasts. The celebrations take place from December 26 to January 1 every year. Each of Kwanzaa's seven days honors a different principle: Umoja (unity), Kujichagulia (self-determination), Ujima (collective work and responsibility), Ujamaa (cooperative economics), Nia (Purpose), Kuumba (creativity), and Imani (faith). These principles are thought to have been crucial in the development of strong, productive African families across different countries. As such, many of the festivals' biggest takeaways are universal prosperity lessons that anyone from any background can appreciate.

Timed at the very end of the year, Kwanzaa asks us to look back on how we've managed or struggled with money, and it offers five valuable lessons to channel positive energy toward lucrative outcomes in the future.

01 of 05

Financial fluency is foundational.

Because Kwanzaa uses Swahili words, there's a lot of conversation about languages and fluency. Traditionally, Kwanzaa celebrants describe the applications of the lessons—and, rather than assuming that everyone "gets it," this celebration is filled with over-explaining.

Kwanzaa leaders dedicate time to concepts that are usually glossed over, especially topics such as money. Elders reveal the ways that they managed money and resources during difficult times. During the long feasts is often when people ask questions like, "Is all debt bad?" and "What is a 401k anyway?" and "What in the world is an NFT?" The intergenerational nature of Kwanzaa offers the opportunity to explain in detail money matters that people might have been ashamed to admit they didn't know all year long.

02 of 05

Charity is nonnegotiable.

Kwanzaa draws upon the spirit of the Jewish holiday of Rosh Hashanah, which prepares for the new year by reflecting on mistakes, reconciling with others, and performing acts of charity and service. The principle of Umoja (unity), Imani (faith), and Ujima (collective work and responsibility) all lead back to the notion that giving is not negotiable. Whether it be giving money or donating necessities, throughout the seven days, celebrants are encouraged to act upon the spirit of giving to others.

Not only is this philanthropic, but the belief is that helping others helps the giver. African cultures are often collectivist; in other words, the value and practice of togetherness ensures that the family and the group protect each individual. To reciprocate, each person is meant to contribute their wealth to others to ensure that this harmonious life cycle of giving and receiving continues for everyone. Not only does Kwanzaa teach that riches have no value if you have no one to share them with, but it also reiterates the words of Anne Frank: "No one has ever become poor by giving."

03 of 05

Creative financing starts at home.

To avoid over-commercialization, gifts handed out to family members on the last day of Kwanzaa are often homemade. By its nature, Kwanzaa forces people to show their creative talents and to value them in new ways. As such, celebrants may even end up discussing new business ideas during the holiday—and sometimes, there are early offers to invest.

Over these days of bonding, the best cook in the family may be told that they should finally open that food truck they've been dreaming about. Extended family members may finally sit down to talk about what they plan to do with family property or how they want to pool their money for a youngster's college fund. Ujamaa (cooperative economics) promotes the notion of crowdsourcing—not just from strangers, but from relatives and family members who are truly invested in your dreams. Dinners can feel like pitch competitions, and sometimes creative financing works out for a new entrepreneur.

04 of 05

Money can't buy love.

Kwanzaa is intended to be a welcomed calm in the frenzied Christmas storm of buying from big-box stores. People are encouraged to make gifts, regift unused items, and—only as a last resort—buy a store-bought gift from a Black-owned business.

Whereas most people would bust their budget trying to give small gifts to everyone they come across over seven straight days of celebration, Kwanzaa's open invitations and communal practices make this virtually impossible. The principle of Nia (purpose) knocks out the sense of obligation to give gifts as a way to express love, commitment, and affinity. Kwanzaa promotes purposeful spending and never frivolously splurging beyond one's means, especially not to impress anyone or to buy their affections. Many Kwanzaa conversations center on lowering consumer debt and focusing instead on meaningful investments.

05 of 05

Always bet on yourself.

Daily rituals during each of the seven days are meant to build you up. Self-confidence and congratulations are flowing, and it's easy to see the parts of your life where impostor syndrome might be stopping you from living your best life. Imani (faith) doesn't only apply to the spiritual realm, but also to the faith that you can achieve great things—in your job, in your education, and surely along your wealth journey.

Kwanzaa intentionally washes away the self-deprecating words and actions that keep so many of us stagnant. Instead, this celebration teaches the lesson that we can only win big when we bet on ourselves. Faith is coupled with personal responsibility, as Kwanzaa teaches us that no one can transform your personal life or your finances but you.

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