Why Financial Literacy is so Important in the Black Community

Historic Systemic Racism Despite changing times, there is still a significant amount of disparity and inequality for Black men. Historic systemic racism has allowed for racist policies and laws to discriminate against Blacks and deter them from succeeding. Examples include denying housing options, health care access, and quality education for Blacks. Moreover, enacting harsher sentences for Black offenders have arisen in alignment with more Blacks being targeted for stop and frisk and jail time.

When it comes to finances, Blacks tend to have half as many people participate in the stock market and get a 401K, compared to Whites. The Bureau of Labor Statistics states that Blacks’ unemployment rate during the current pandemic reached 16%, whereas it was at 10% nationally. Forbes reports that out of seven million finance jobs in the country, only 10% of financial positions are held by a Black person. Since a minority of Blacks are in the financial sector, there is less help and advice given to the Black community about how to lower debt, understand interest rates, and protect them from identity theft, and budget wisely.

Early Black Towns

When Black men are given the tools to become financially educated and literate, everyone benefits. Nonetheless, due to systemic institutionalized racism, many of these efforts have been squashed. Examples include the following:

Black Wall Street: A successful group of progressive Blacks built a community of businesses and schools in Tulsa, Oklahoma. Black-owned businesses were supported, and Black entrepreneurs were celebrated widely. O.W. Gurley was a Black landowner who invested 40 acres of land in helping other Blacks in the Deep South. He loaned money so many aspiring Black business owners could grow their own companies, which led to the building of theaters, newspapers, and grocery stores. Black-owned offices for doctors, lawyers, and banks were also built. Additionally, a well-funded school and hospital were created, and many Black residents lived comfortably and safely. Yet in the Tulsa massacre in 1921, White mobs inflicted extreme racial violence on Black Wall Street. They shot and killed 300 Black people and left the town in complete ruin by looting and burning it down. Many Blacks were unable to recover their finances due to such devastating losses.

  • Black Wall Street: A successful group of progressive Blacks built a community of businesses and schools in Tulsa, Oklahoma. Black-owned businesses were supported, and Black entrepreneurs were celebrated widely. O.W. Gurley was a Black landowner who invested 40 acres of land in helping other Blacks in the Deep South. He loaned money so many aspiring Black business owners could grow their own companies, which led to the building of theaters, newspapers, and grocery stores. Black-owned offices for doctors, lawyers, and banks were also built. Additionally, a well-funded school and hospital were created, and many Black residents lived comfortably and safely. Yet in the Tulsa massacre in 1921, White mobs inflicted extreme racial violence on Black Wall Street. They shot and killed 300 Black people and left the town in complete ruin by looting and burning it down. Many Blacks were unable to recover their finances due to such devastating losses.
  • Seneca Village: Seneca Village was a thriving Black community that provided refuge and served as a safe sanctuary for those facing discrimination and other threats in New York City. Compared to other Blacks living in New York, half of the Blacks in Seneca Village were more likely to own their individual homes and thereby be given the right to vote. Most of the children who resided there also went to school in the area. Nonetheless, the City forcibly took over the land and turned it into what is now known as Central Park. This led to about 1,600 residents losing their property and being coerced to relocate elsewhere. Despite fighting against the law and trying to save their homes, schools, and churches, their community was bulldozed over without a second thought to such a destructive turn of events.

Prioritizing Financial Literacy

It is essential for Black men to prioritize financial literacy to achieve the following:

  • Make sound business decisions: There are so many components to making business and life decisions. For instance, being able to read financial statements and understand balance sheets, interest rates, retirement accounts, and portfolios allow you to be aware of any hidden scams and plan for the future better. Financially literate people can save enough for the future and have extra spending money to use for other purposes.
  • Financial freedom: Achieving financial stability and security allows Black men to boost their income and protect their assets. As a result, Black men gain better access to higher education, quality health care, buying a home, and investing in outside ventures. They can understand how to budget effectively to save money for a rainy day and have peace of mind by not worrying about paying the bills and overcoming debt. They achieve real freedom by not having to live paycheck to paycheck and not being faced with an overwhelming credit card or student loan debt and interest rates.

FINAL THOUGHTS

True power comes from being financially literate to manage your money well and build up your portfolio. You can protect the assets you build, secure your future, and live empowered by having the financial means that come from being financially literate.

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