Did you know the racial wealth gap has continued to widen? In 2013, the average wealth of the designated groups was as follows: white households had $134,000, Hispanic households had $13,000 and Black households had $11,000. According to the most recent Census, the average household wealth of Black households is $14,100, Hispanic households $31,700 and white households had wealth of approximately $187,000. The wealth increase for Hispanic households more than doubled while Black households increased by $3,000 and white households had a wealth increase of more than $50,000.
There are a host of reasons for the discrepancy in Black wealth, the least of which is redlining and the fact that Black people are generally paid less than their white counterparts for doing the same job. Black families face disparities other groups do not. These are not the only reasons of course.
Black people also contribute to the wealth gap by not intentionally seeking out wealth accumulation and instead overspending and carrying too much debt. It is possible for Black families to increase their wealth despite the multitude of obstacles we face. We are very resourceful and resilient as a people. When it comes to finances, it is time for us to put some of that resourcefulness to work!
Because of all the obstacles and roadblocks placed in front of us, we have to be that more strategic in our response. Basically, we need a game plan. We cannot sit idly by waiting for things to get better. We have to do the work to make our lives better financially. This can be done by reading more on the topic and learning from others who are financially savvy.
The two top creators of wealth are homeownership and retirement accounts. The average wealth of homeowners is $305,000 versus those who rent who have a negative wealth of $4,000. No matter where you are financially at this time, there is still an opportunity for you to get to a better place. Most people don’t think about their financial future when they are young, but that is exactly when you should start planning. There is no time like the present. Black people do not have the luxury of blindly going through life without a plan. We have to be very intentional about our money and how we save, spend and grow it. Here are a few steps to get you started.
Step 1: Decide What You Want Your Financial Life To Look Like
Are you debt Free? Do you have an emergency fund and retirement accounts? Do you want to be a homeowner?
Step 2: Believe The Life You Want Is Possible
You have to believe that financial security is possible for you and your family.
Step Three: Take Action
You have to take the first step toward your goals. Baby steps are fine to start, but you have to get started in the direction you want to go. You might surprise yourself with all you are capable of accomplishing.
We have all heard the refrain that “we have to work twice as hard to be considered half as good”. With all the obstacles that have been placed in front of the Black population for centuries, this is the approach we need to take to get ahead. Being intentional about our finances through saving and investing is one thing we can control without interference. No one is blocking us from saving and investing our money. We have to make the choice to do it and take our equity back! There is no better time like the present.