By Mrs. Shay Cook, CEO & Founder of Crusaders for Change, LLC (C4C) Accredited Financial Counselor® & Financial Fitness Coach®
As we celebrate Black History Month, it's not only a time to honor the extraordinary achievements and contributions of Black Americans in shaping our collective history but, also an opportunity to lay the foundation for a stronger future.
Beyond recognizing the struggles and triumphs of the past, we commit to empowering our community by enriching financial literacy. Through understanding the historical context of financial challenges faced by Black Americans, we aim to foster economic resilience and create pathways to financial success that reflect the strength and resilience embedded in our heritage.
We build financial strength so we can continue to give and build up others in our community to do the same. 2 Corinthians 9:10 (NLT) says, “For God is the one who provides seed for the farmer and then bread to eat. In the same way, he will provide and increase your resources and then produce a great harvest of generosity in you.”
Paul, writing to the Christians in Corinth here, makes the point that building up resources and giving more is not so we can get more from God, but to be able to be an even greater blessing to our community and continue to give more resources and blessings to those around us. Being generous givers aligns us with God’s will, and in turn, blesses our community and builds others up.
Black Financial Literacy: Knowing the Numbers
Financial literacy means understanding and being smart about money. It involves learning how to manage your money wisely, making good decisions about spending and saving, and understanding important concepts like budgeting, saving, and investing. It's important to have the knowledge and skills to handle your money well, so you can achieve your goals and make your dreams come true.
We reviewed the latest data from the ITAA Institute-GFLEC Personal Finance Index (P-Fin Index) to understand better the current state of financial literacy and financial health among Black Americans. There are 44 million Black Americans in the U.S.—making up 13% of the population and wielding a significant economic influence with $1.2 trillion in annual purchases. Upon reviewing the financial literacy data for the U.S., it’s noted there's room for improvement in financial health and literacy.
Compared to the broader U.S. population, Black Americans face challenges. While the reasons behind these disparities are intricate, one key aspect to address is enhancing financial literacy. “Personal finance knowledge among African-American adults lags that of Whites. On average, African-Americans answered 38% of the P-Fin Index questions correctly, with only 28% answering over one-half of index questions correctly. The analogous figures among whites were 55% and 62%, respectively.” (GLFEC, 2019).
Financial Literacy Influences Personal Financial Health
The financial history of Black Americans is intertwined with overall financial health today due to historical factors that have shaped economic opportunities and challenges for the Black community. Throughout history, Black Americans have faced systemic barriers such as slavery, segregation, and discriminatory policies, limiting access to economic resources and opportunities.
In these realities of life in America, knowledge really is power. Being financially literate holds significance because it empowers individuals to navigate these challenges with the knowledge and tools necessary.
Understanding financial concepts and tools enables individuals to make informed decisions, resist exploitative practices, and build economic resilience. Financial literacy is a tool for economic empowerment, countering historical injustices, and contributing to the overall well-being of the Black community.
Those who understand their personal finances are more likely to shape a resilient financial future because financial literacy equips individuals to:
1. Navigate Economic Challenges
Understanding financial principles allows people to navigate economic challenges, such as job loss or economic downturns, with greater resilience.
2. Build Wealth
Financial literacy empowers people to make strategic decisions about saving, investing, and wealth-building, breaking the cycle of historical economic disparities.
3. Avoid Predatory Practices
Knowledgeable individuals are less susceptible to predatory financial practices, protecting themselves from exploitative lending and financial schemes. Proverbs 10:2-3 (NIV) says, “Ill-gotten treasures have no lasting value, but righteousness delivers from death. The Lord does not let the righteous go hungry, but he thwarts the craving of the wicked.”
4. Plan for the Future
Financial literacy encourages future-oriented thinking, helping individuals plan for long-term goals such as homeownership, education, and retirement. Financially literate people are more likely to use financial counseling services and resources to plan for the future. Proverbs 15:22 says, “Plans fail for lack of counsel, but with many advisers they succeed.”
5. Contribute to Community Well-Being
People with financial literacy skills can positively influence their communities by sharing knowledge and promoting economic empowerment.
In essence, being financially literate is not just about personal financial well-being; it's a tool for breaking historical cycles of financial inequality and fostering a resilient and prosperous future for Black Americans.
Strengthening Our Financial Future
As we celebrate Black History Month, let's not just honor the past but also lay the foundation for a financially empowered future. Join Crusaders for Change (C4C) in this journey to celebrate our history and build a community that's financially resilient together.
We are passionate about helping individuals and families from all backgrounds increase their knowledge and skills to handle their money wisely. A first step for many people is seeking guidance from our Accredited Financial Counselors® at C4C. Our experts are equipped to provide personalized financial counseling, education about budgeting, debt management, savings strategies, and more. We make learning about personal finance accessible, easy to understand, and fun! Schedule a free clarity call today to start your journey towards a secure financial future.