In one sense, the financial challenges facing Black Americans are just like any household of any ethnicity. But given the history of this country and how discrimination has filtered into financial realities, they often have a unique hill to climb.
That leads to common issues like overcoming the racial wealth gap, in order to create generational prosperity; coping with barriers in critical areas like homeownership and access to capital; and juggling family caregiving responsibilities, without derailing one's career and finances.
Some money questions that are worthy to be asked:
Is the racial wealth gap real?
The Federal Reserve found in its Survey of Consumer Finances significant racial disparities in financial well-being, with white families having on average about six times the wealth of Black families. While improving from previous surveys, current statistics reflect the reality of centuries of discrimination.
Retirement savings are one victim of being paid less, having a higher unemployment rate, and having less access to workplace 401(k)s, according to AARP. That then cascades between generations, with lower career earnings resulting in lower levels of inheritance. Despite these hurdles, Black wealth has been increasing on multiple fronts, according to the Brookings Institution.
How can homeownership be a centerpiece of wealth-building strategies?
For many American families, the home is their biggest asset. But Black Americans possess a lower percentage of homeownership, on average, at around 45%. Part of that historically stemmed from the practice of redlining, where access to credit was restricted in certain areas based on factors like ethnicity and race.
Even today, racial factors are holding back levels of home equity: The Brookings Institution found that appraisal of homes in majority Black neighborhoods were over 20% lower than they would be elsewhere. But gains are certainly being made, with the Black homeownership rate rising fastest among all racial groups, according to the National Association of Realtors.
How can I handle family caregiving responsibilities?
Studies have shown that a disproportionate percentage of the Black Americans are caring for the elderly, or family members with chronic health conditions, often without any compensation. They also spend more hours per week on caregiving and are especially financially strained by out-of-pocket expenses.
Relying on external help like home health aides can sometimes be the smart choice, both emotionally and financially. Family members should also take full advantage of state and federal assistance available for caregivers, which can be researched through organizations like the Administration for Community Living and the Family Caregiver Alliance.
While certainly a laudable goal, and part of what keeps the fabric of family and society knitted together, caregivers should take care not to assume all responsibilities themselves and derail their own careers and finances in the process.