Susu economics make great savings sense. Don't believe the hype. Susus are legal. Susus are safe. Most importantly, Susu clubs work. For those of you unfamiliar with the term, Susus are essentially informal black banks. They generally serve two purposes: they issue loans or act as long-term savings accounts to its members. During a time when people feel antsy about putting their money in the hands of FDIC-insured financial institutions, some may think it's ridiculous to consider giving your hard-earned bucks to a local barber, nurse or accountant serving as your Susu collector, a person who manages the entire fund. But taking this calculated risk may have you laughing as you pass the bank. In a way, a Susu club represents African American collective economics at its best.

Don't get me wrong. I'm not anti-establishment. I don't think CitiBank is going to run off with the $1000 I have sitting in my savings account. That said, I love Susus. I was first introduced to them as child. As a tween I'd hear my grandmother and great-aunts chatting at the dining table over empty Pepsi cans and a hand of spades about what they planned to do once their "Susu hand" came up. Their economic agendas ranged from trips to the Caribbean and Atlantic City, to down payments for mortgages and automobiles. As a lover of all things grand, I knew instantly I wanted this "hand" dealt to me when I grew up.

Over the years I learned that the "Susu hand" they were referring to wasn't comparable to hitting the lottery, it was in fact their turn at collecting money that they each toiled and skimped to save every week for a designated amount of time. As a Susu club member, when your "hand" comes up you get all the money you've saved, or would have saved, in one lump sum. For example if the Susu hand goal is $5200 per person, ideally you'd like to gather 52 people who will commit to giving $100 per week for a year. The Susu collector is responsible for holding each week's pot, and over the course of a year every week someone would get that cache, commonly referred to as a Susu hand -- minus a predetermined fee given to the collector for managing the account. By participating in the Susu club, they knew they'd be guaranteed to save a certain amount of money to put towards their objective.



The concept isn't new. Susus have been traced to back Ghana and are one of the oldest forms of banking, or collective economics. In the history of the earliest Susus, people created contracts with the local collector for loans, to hold savings for the group and to collect interest. In the U.S. in modern times, particularly post-integration, Blacks utilized the system to save for big-ticket items, like mortgages, to avoid paying hefty, predatory interest rates or because many were denied loans despite being qualified.

Nowadays, Susu clubs are typically set up by a group of African American friends or colleagues (and many Asians) who come up with a specific financial target they each want to achieve. I found my Susu group while looking to achieve every Black woman's goal: perfectly coiffed hair. My beautician introduced me to my Susu collector, a beauty shop owner. Sounds funny, but small business proprietors usually have a knack for numbers and are great networkers -- they tend to be the perfect Susu collectors. Over the last three years I've participated in several Susu hands and have used my boon to pump up my long-term savings accounts, pay off credit cards and travel. While Susus aren't my only source of savings, I've benefited greatly from them and love having a Susu club in my wealth-building arsenal.

Here are some tips for those of you interested in participating in one:

Tips for Participating in a Susu

1. Do your research before you join. Understand the terms, meaning the time period you're expected to contribute, and penalties, meaning the fee for late payments or forfeiture. In addition, make sure the Susu club you join is reputable. You can do this by asking other participants and people who may have knowledge of the group's history.
2. Sign a contract. Get everything in writing so you know your obligations and have a system of accountability for the collector.
3. Don't be late. The economic purpose of the Susu is boost up your savings, so paying late fees is counterproductive. Make sure you allocate space for your payments in your budget.
4. Have a purpose for the money you save. Saving is great but once you get your money it's easy to go tear 'da mall up. Stay focused. Have an intention for the money you're saving -- you may even want to write it in your calendar on your payout day. This ensures that all of your hard work pays off.


A trained life coach, S. Tia Brown has spent the last 10 years following her passion for journalism as an editor, writer and TV correspondent. Brown has worked for CNN, E!, MSNBC, the NY Daily News, Essence and Black Enterprise. Most recently she served as Senior Editor for In Touch Weekly magazine. Check out her advice column 'Do Better, Be Better' at www.tiabrown.com.