The 2013-2014 African American Financial Experience study is out. Commissioned by Prudential Financial, this is the second bi-annual study measuring financial attitudes and trends in the African American community, and is part of a series of signature research by the company examining financial trends in America’s multicultural communities. The survey was released to media on May 21, 2013, accompanied by a panel discussion of survey findings with National Urban League CEO Marc Morial; Journalist, Author and Financial Education Advocate Valerie Coleman Morris and Prudential Vice President Richard Michael Davis, followed by a luncheon and “fireside chat” with Morial conducted by CNN Special Correspondent Soledad O’Brien, held at the headquarters of Scholastic Inc. in New York City.
The study is based on a March 2013 poll of 1,153 Americans who identify as African American or Black and 471 general population Americans on a broad range of financial topics. Respondents are ages 25 to 70 with a household income of at least $25,000 and some involvement in household financial decisions. The median income of those surveyed was $68,000.
Some of the more interesting results from the survey:
Half of African Americans surveyed say they believe working with an advisor would help them make better financial decisions. However, only 19 percent say they have a financial advisor.
The population of middle-class and affluent African Americans continues to grow, with 40 percent of those surveyed reporting household incomes of at least $75,000 and 25 percent reporting six-figure incomes.
Despite feelings that the U.S. economic downturn has not ended, half of African Americans feel better off financially now than a year ago. Overall, African Americans remain significantly more confident about their financial situation than the general population.
Paying down debt remains the No. 1 financial priority for African Americas, even for those with higher incomes. Non mortgage debt is significantly higher than the general population. College educated African Americans are twice as likely to have student loan debt compared to all college educated Americans.
Eighty percent of the African Americans surveyed eligible to contribute to an employer retirement plan are doing so. The downside: Many continue to contribute less than their employer match or take loans from their plan. A major barrier to maximizing participation is lack of education about how these plans work.
The survey also highlights often observed differences between African Americans and the general population when it comes to financial priorities. While both groups feel that saving for retirement is important, it’s not as high a priority for African Americans, with only 55 percent of those surveyed counting it as a financial priority, versus 62 percent of the general population. On the other hand, more African Americans made funding education for children and grand children a priority, at 27 percent, than the general population, at only 18 percent.
Another finding of the study highlights why the financial literacy of Black women is of critical importance to the financial experience of African Americans: compared to women overall, African American women are significantly more likely to be the decision-makers of their household. Two-thirds of African American women surveyed are working, compared to 58 percent of the general population, and they are less likely than the general population to have a spouse or partner present. As a result, African American women are more likely to carry the financial responsibilities of a household on a single income.
According to Prudential’s Financial Confidence Index, despite both historic and current economic disparities experienced by African Americans, and strong sentiment that the economy hasn’t fully recovered, Black people remain more confident than the general population about their future household finances and our economy as a whole. The most confident:
Those who attend church at least once a week are more confident than those who attend less than weekly.
Blacks in the West region of the U. S. are most confident, followed by those in the South and the Northeast. Least confident: Blacks in the Midwest.
Homeowners are more confident than renters, as are those who are college educated and those making at least $75,000 a year.
Finally, youth brings optimism, with Gen Y African Americans most confident and Black Baby Boomers least confident.
For more details on the results of the African American Financial Experience Study, go to http://www.prudential.com/media/managed/aa/aafacingthechallenge.shtml