On: Financial Education

Many people desire to be financially free.  This is a dream that appears to be slipping further and further away for most.  We live in a time where the average American has more debt than ever before, less people are purchasing homes, and the student loan debt crisis has left an entire generation of people believing they will never achieve their goals.  

Black people are hit the hardest by these conditions.  The wealth gap in America is staggering.  The average white family’s net worth is $171,000 and the average black family’s net worth is $17,150.  In a place like Boston, it’s even worse.  The average white net worth in Boston is $250,000 and the average black net worth is $8.  We are on pace for black wealth to be 0 by 2053.  

Financial freedom is just that, freedom.  Life feels different when you are not living check to check (a problem many rich people have as well but it is different for poor people).  Your ability to dream is stifled when your main concern is where your next meal is going to come from. I saw a great quote on Instagram the other day: “Money might not buy happiness, but it can afford access to things that do.  Like zero debt, property ownership, travel, shoes, dining out without feeling bad about the food at home, and the ability to take care of your loved ones after you’ve taken care of yourself.”

When people are pursuing more money or simply trying to change their circumstances, it’s not that they are looking to buy their happiness, they are looking to buy their freedom.  It’s what we all want, freedom. We want to be able to dream. Black people in America have not been truly able to dream because they have not had access to the wealth their white counterparts have had.  

What Investing and Personal Finance Means to the Poor

When it comes to personal finance, specifically investing, it can feel daunting to begin with but one thing we know is that it takes money to do so.  Kanye once said “Having money isn’t everything, not having it is.” As we have seen from the aforementioned statistics, by and large black people do not have the money to play in this arena.  

It is hard to play any game if you don’t have the required equipment.  Black people are paid less than every other group in this country.  We don’t need statistics to tell us that though we have plenty of anecdotal evidence to back this up.  Think about wherever you go, the people in the lowest skilled, lowest paying jobs are almost always black.  In white collar settings, the lower levels will have black people but the higher up the food chain you go, the whiter it gets.  This is the world we live in, nevertheless, we persist.

When we do start to amass some money there is often trepidation around things like investing in the stock market.  Many of us grew up hearing our parents and grandparents talking about their distrust for banks and the stock market.  It makes sense, these are people who survived the Great Depression and several financial collapses. Often times in situations like this, black people were the last, if they did, to recover their money.  Upon my Grandfather’s death, we found thousands of dollars he had hidden in his favorite chair.  

Go to College

Growing up we were taught, like many others, to just go to college.  There was a time where that was guaranteed to give you a good life, those days are over.  With student loan debt coupled with the trouble black college grads have breaking into many fields, going to college can sometimes set you back instead of setting you up for the future.  I personally know several marketing, business, and engineering majors who are now working low wage jobs and saddled with student loan debt because they were unable to land jobs in their fields of study.

Home ownership has often been perceived as one of the primary builders of wealth in America.  Black people have been barred and restricted from home ownership in many places in this country.  In places where black people have been able to buy homes, limited amounts of money have caused them to be unable to maintain those homes, therefore costing us thousands of dollars in appreciation and equity.

A Way Forward

Things do not have to and will not stay this way.  The systemic oppression that has maintained a stranglehold on black wealth must come to an end.  It starts with introducing financial education early. It is a shame that there are no personal finance classes taught in middle and high school.  The basics of credit, opening a bank account, and taxes need to be taught to our kids before their 18th birthdays when credit card companies flood them with false promises of free money.  

It’s not too late for our adults either.  We need programs in low income neighborhoods to teach people about financial literacy, getting out of debt, and the work it takes to create a better life.  For those who may never have enough for retirement because it’s simply too late, we need to make sure they know every option that is available to them.  

This is what we are here to do.  We want to change futures, give hope, and rewrite family narratives.  We have been failed for far too long. We cannot afford for another generation to pass without the tools necessary to survive in this world.  We are not doing this because we expect money to bring happiness, we are doing this because we want our people to be free. By our people, we mean all of the poor and disenfranchised.  We mean all who have been oppressed and kept in their conditions. The goal is to make the next generation freer than we have ever been.  

The good people over at Bankrate have created a resource that explains how the Federal Reserve’s recently lowered rates impact preexisting debt and refinancing options. Check it out here:  https://www.bankrate.com/loans/student-loans/how-fed-rate-cut-impacts-student-loans/