When it comes to personal finances, Black Americans face a double-edged sword.
Reflecting on a new survey, Dann Albright, a research analyst at The Ascent, says Blacks were the most likely to invest regularly and showed some of the best saving habits. And they were least likely among all groups to have credit card debt. Still, he told BLACK ENTERPRISE via email that Black Americans had the lowest net worth of any group and were least likely to make more than $50,000 per year. Among those with non-retirement investment accounts, Black Americans at 56% are the most likely to invest regularly. The Ascent survey analyzed the similarities and differences not just between white and Black Americans, but of all the major ethnic groups across America. The survey was done via Pollfish and included 2,000 American adults ages 18 and over in late September 2020. A Motley Fool firm, The Ascent reviews financial products including credit cards, savings accounts, mortgages and other items to help people make informed decisions on money matters. While people of color (POC) may be less likely to have a savings account, when they obtain one, nearly 54% put away more than 10% of their income, compared to 36% of White Americans with those accounts. It is typically recommended that you save at least 20% of your income monthly or 10% if that’s the most you can manage.
Rebecca Wiggins, executive director of the Association for Financial Planning & Education AFCPE), commented on those results.
“The fact that people of color save significantly more of their income than white individuals and still have dramatically fewer assets highlights the fact that smart financial behavior is not enough to overcome the financial barriers facing families and individuals of color in today’s society.”
Further, Black Americans at nearly 56% with investment accounts are the most likely to make investing a part of their regular routine. This is considered a good habit to have because investing consistently monthly, is one of the most important rules of investing. And POC were almost three times as likely as white Americans to choose to secure their children’s future as an investing priority.
Interestingly, about 30% of Black American reported investing money to save for retirement or put into general savings/emergency funds as among top investing priorities.