Black Americans Take A Different Approach To Debt Management — Here’s How To Cut Expenses

Sticking to a disciplined budget and improving financial literacy are ways to help bolster debt management.

When it comes to debt management, Black Americans view that strategic approach differently than other groups.

Blacks carry higher auto loan debt ($20,000 versus $18,000), medical bills ($6,100 versus $5,600), and buy now, pay later debt ($1,345 versus $1,221). Roughly 28% of Black Americans have student loans, compared with 19% of all Americans.

The data was furnished to BLACK ENTERPRISE by Clever Real Estate, a platform that operates as a real estate marketplace. It quizzed 1,000 U.S. adults on their debt levels and attitudes on debt, including 202 Black Americans. Clever provided a breakdown of the statistics on the Black Americans surveyed.

Clever Data Analyst Clara Haverstic indicated by email that the finding that Black Americans are more likely to carry student debt is consistent with discoveries from this report. According to her, the findings reveal a systematic lack of financial resources for Black students entering higher education, with generational financial disparity playing a large role.

“A history of low wages and an inability to build generational wealth continue to impact Black households when it comes to repayment,” she told BE.

Further, the data disclosed 22% of Black Americans are less likely to have a mortgage than 29% of Americans overall, reflecting broader numbers displaying lower homeownership rates for Blacks.

Some 54% of Black Americans with debt reported that they’ve missed or delayed a debt payment in the past year, 10 percentage points more than all Americans. Likewise, 66% of Black people say they can pay all their bills on time, compared with 72% overall.

However, Black Americans with debt have lower median debt amounts overall, $139,000, much less than $178,000, for all respondents. And 48% of Blacks are much more likely to say they see their finances improving in 2026, compared with 38% overall.

Even so, 34% of Blacks with no debt are 10 percentage points less likely to say they are prepared for an unexpected large expense against 44% of non-indebted Americans, according to Clever data.

The upside is that there are multiple options to bolster debt control, reduce financial stress, and ultimately cultivate wealth.

The first step to managing debt is to avoid taking on new debt. The second step is to start paying off the debt with the highest interest rate first. Haverstic says, ”Paying off this debt first keeps it from growing higher.

Financial literacy is one of the best ways to become empowered and avoid being taken advantage of, Haverstic says. She indicated that it gives you tools to navigate major financial decisions, such as saving for higher education, buying a home, and investing for retirement. She suggested starting with resources like the FDIC or CFPB, or see what informational resources your bank offers.

Consider establishing a disciplined budget and sticking to it to help you identify how much you are spending and where. Haverstic noted that people are frequently unaware of how much they are spending, noting that things like dining out add up. Thus, checking spending habits is essential. “It makes you stop and think before making a purchase. “

Research reveals other actions you may do well to consider. They include trimming needless costs like subscriptions and coffee runs, using the extra cash to pay off debt. When you can, many experts advise making additional payments on your debt over what is required. This strategy can help to accelerate the time to erase liability.

Creating an emergency fund if you don’t already have one is also a good idea. This is a cash reserve set aside to cover unplanned expenses, such as car maintenance, home repairs, medical emergencies, and job loss. It is often recommended to have at least three to six months’ put away to take care of unforeseen costs.

Don’t forget to consider working with a credit counselor or financial advisor. Even though it might cost money, the investment might be worth it. They can often help with everything from creating a realistic budget based on your expenses and income to working with creditors to negotiate lower interest rates and monthly payments.

Another benefit is that they can help ensure your creditors are paid on time and assist you in paying off debt faster, both of which can help build credit scores.