With Black spending power increasing every year — in fact, recently surpassing $1 trillion — and a GDP (gross domestic product) equivalent to being the 16th largest country in the world, there should be reasons to be optimistic about African American wealth. Surely, with data such as these, many would conclude that blacks in America are doing quite well. But we know that is simply not the case.
African Americans have made tremendous strides in just about all industries in America. They are doctors, lawyers, teachers, politicians, religious leaders, athletes, entertainers and scientists. However, a primary stumbling block for this demographic is money management. The most significant concern when meeting with seniors and baby boomers in the African American market is that they are inadequately prepared for retirement because of the severe lack of savings/investments. Most of them have never acquired basic financial management skills and are worried that they may not have enough money to live comfortably in their retirement days. Many of them have never been taught basic fundamental financial strategies.
There is an urgent need for financial literacy education throughout America, but especially for those in the African American community. Here are the reasons why:
1. Financial education is lacking.
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A major cause of the problem is that, from elementary school through college, African Americans are less likely than the general population to receive any type of basic financial education class. For many, these types of classes were simply never part of the curriculum. Similarly, very few African American children report learning from their parents. Many of the parents never learned basic money skills as a child, and do not have the knowledge to pass these skills on.
2. Increased income does not translate to increased financial literacy.