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Black Americans Show High Levels Of Financial Well-Being
A study finds Black communities are modeling financial resilience and grit in unprecedented ways. • Susan Rupe
Black Americans make up a disproportionate percentage of lower income groups, yet have higher financial well-being scores than the general population.
That was a key finding of a study, Black America’s Financial Wellness, authored by Timi Joy Jorgensen, assistant professor and director of financial literacy at The American College. The research evaluates the main factors impacting financial well-being in the Black community to assess ways the financial services industry can guide Black Americans toward better financial success.
The bad news, according to the study, is that more than 1.2 million Black adults lack access to financial services, meaning no bank accounts, no access to credit, an unstable income and no financial literacy. Despite these findings, Black adults showed higher financial well-being scores than the general population.
The study also showed that Black Americans represent “a fertile and untapped marketplace of resilient and capable consumers ready for better financial alternatives … Therein lies the opportunity for unprecedented growth.”
How does the industry increase financial well-being? The report made these recommendations:
» Exposure. Share culturally competent education married with financially sound practices.
» Stability. Focus on the next goal — wealth creation comes after financial stability.
» Empowerment. Change the narrative around what it means to “make it” financially from “making money” to “making your money work for you.”
The report showed: » More than 10% of Black men and 14% of Black women reported the lowest levels of access; only 8% of Black men and 7% of Black women experienced the highest tier of access. By comparison, 30% of white men experienced the highest tier of access, and only 3% of white men reported the lowest tier of access. » Notably, financial stress was not a significant predictor of financial well-being for Black women, compared to the overall consumer market, where financial stress strongly predicted financial well-being.
Some of the report’s key findings address the following issues:
Economic empowerment and equal-
ity. Black Americans’ lack of access to financial education, stable incomes and financial products influences their ability to take action to address their financial situations.
Black America models financial
resilience. Black women are key stakeholders in the financial culture and well-being of Black communities. The
Average Financial Wellness Score
53.5 53 52.5 52 51.5 51 50.5 50 49.5 49 48.5
General Population Black Americans Men Black Men Women Black Women
SOURCE: The American College
most significant predictors of financial well-being for Black women were actions. Tangible solutions for Black women to improve their financial well-being include paying credit cards in full, being able to handle an unexpected $2,000 expense, and regularly contributing to retirement savings.
The study further showed that when it comes to how Black women are thinking and feeling about money, the biggest predictors of financial well-being are financial satisfaction, financial confidence (or one’s ability to set a goal and accomplish it) and financial self-efficacy (knowing how to act and believing in one’s ability to follow through).
“Communities of color are not being served by financial advisors today,” said Chris Blunt, CEO of Fidelity & Guaranty. “So some of what we saw in this study is a wealth threshold issue, meaning most of the middle market today in the United States is not being well served, because so many financial advisors have moved up to serve affluent and high net worth clients. But even within those segments, I think you’re seeing communities of color not having access to advice and guidance.”
How can the industry respond? Blunt listed two issues.
“The first one is that the industry needs to do a better job of recruiting and attracting people within communities of color to be financial advisors. The other is addressing the lack of knowledge around different types of financial products and making an investment in basic financial literacy.”
Financial literacy is a generational issue, Jorgensen said.
“Communities teach the next generation how they interact with financial services. So I think part of this is a learned gap, both on the financial services side and on the community side, that needs to be addressed through some creative solutions that might bring the community more to the financial services sector, but also bring the financial services sector more to the communities.”
Inclusive Financial Wellness & Empowerment Model
ACCESS
Income stability Financial knowledge Banking Credit
ACTION
Earning Spending Saving Planning
EFFECT
Money management Subjective financial knowledge Financial confidence Financial satisfaction Self-efficacy Financial stress
EMPOWERMENT
Blacks, Hispanics Worried About Retirement Income
A recent F&G survey revealed that 62% of Black American and 74% of Hispanic American investors are worried about their retirement income as a result of the pandemic compared with only 57% of whites, underscoring how COVID-19 and social unrest has further deepened financial disparities across racial lines.
Other findings from F&G’s survey include:
» COVID-induced risk aversion.
Forty-three percent of Black American investors “strongly agree” that the events of the first six months of COVID-19, paired with social unrest and market volatility, have made them less likely to take financial risks, while only 29% of whites reported the same.
» Appetite for new financial products. While about one in four white American investors (28%) report they are more likely to explore new financial products that they haven’t used before postCOVID-19, 41% of Black American investors and nearly one in two Hispanic American investors (49%) say the same.
» Lack of education around role of guaranteed income. Nearly one in two Black American investors have never used a financial advisor (47%) and another 21% have used one in the past but do not currently. This statistic points to an education gap around which products can help create a financial safety net, even amid turbulent market conditions.
Blunt said the findings from his company’s survey showed “there’s a great opportunity to talk to people and ask them, ‘How did COVID-19 change the way you’re thinking about retirement? What’s keeping you up at night?’”
SOURCE: The American College
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@ innfeedback.com. Follow her on Twitter @INNsusan.
The #1 Cause Of A Heart Attack
Heart disease is the leading cause of death in the U.S., claiming the lives of more than 650,000 Americans in 2019, according to the Centers for Disease Control and Prevention. The CDC says that every year, more than 800,000 Americans have heart attacks. So what is the leading cause of a heart attack?
Although many factors, such as genetics, may factor into an individual’s heart attack risk, the top cause is a buildup of fatty plaques in the arteries — also known as atherosclerosis. What is commonly known as “hardening of the arteries” happens when fat builds up in the artery lining. As the buildup increases, the artery narrows. Over time, less blood — and less oxygen — can get through the artery and the heart cannot do its job.
Top contributing factors to atherosclerosis include age, tobacco use, high
blood pressure, high cholesterol, diabetes or metabolic syndrome. A family history of heart attacks is another major factor.
HOW SODA SLOWS METABOLISM
Caffeinated sodas can do a number on your metabolism. It's true that caffeine is a stimulant that increases metabolic rate. But added sugars in that fizzy drink can actually slow down your metabolism.
Fructose, the sugar often used in soda recipes, appears to be a particular culprit, and the high-fructose corn syrup used in many soft drinks can contain 55% fructose. A 2012 study showed
that people who drank fructose-sweetened beverages significantly decreased the number of calories they burned in a day.
When fructose goes through your digestive system, it ends up in your liver, where it gets converted to fat. This raises your triglyceride levels. Both weight gain from too many calories in soda and high triglycerides from too much fructose are hallmarks of metabolic syndrome. This cluster of metabolic symptoms puts you at greater risk of heart disease, diabetes and stroke. your body stay asleep all night and wake up feeling rested.
THE BEST SUPPLEMENT FOR A GOOD NIGHT’S SLEEP
If you’re doing everything you can to get more shut-eye, but you still struggle with sleep, you may want to think about taking a supplement. Lisa Moskovitz, registered dietitian and CEO of the NY Nutrition Group, gave the inside scoop on the best supplements for sleep.
Her top recommendation is valerian root, an herb native to Europe and Asia that has been used for centuries to promote better sleep. And once you’ve fallen asleep, ashwagandha could be your key to staying asleep through the night.
Ashwagandha is a natural compound that not only helps get you into a sleepy state, but may help keep you there throughout the night, she said. This root
extract can also help alleviate anxiety and improve how you cope with stress — all of which can impact how
well you sleep at night. No more waking up in the middle of the night with worries about the day to come; with an ashwagandha supplement you can help
QUOTABLE
Low wealth is a risk factor that can dynamically change over a person's life and can influence a person's cardiovascular health status.
— Muthiah Vaduganathan, MD, Brigham and Women's Hospital, Boston
NOT EATING ENOUGH OF THIS COULD SHORTEN YOUR LIFE
Researchers say having a low omega-3 index could shorten your life by almost five years. So you might want to head to your favorite seafood market and pick up some salmon.
A study published in The American Journal of Clinical Nutrition looked at omega-3 indexes in more than 2,000 people and found that the higher the index, the lower the risk of death.
People with an omega-3 index in the highest 20% of the population lived about 4.7 years longer, or after age 65, than people with an omega-3 index in the lowest 20%, researchers found.
Health benefits of omega-3 include reduced inflammation, decreased hunger levels and improved blood sugar regulation. You can pop a supplement to get more omega-3, or you can get it by consuming flaxseed oil, wild salmon, mackerel, walnuts, sardines or chia seeds.
DID YOU KNOW ?
Sweetened cereal is the worst bedtime snack for your waistline. Source: Cleveland Clinic
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