Black families are more confident about achieving the American Dream than the general population. However, African Americans fall short on executing life-changing measures such as accumulating wealth, being better prepared for retirement and building up savings. Here are a few facts (and advice) about African American economics:
Some 84% believe the American Dream means financial security; 78% in not living paycheck-to-paycheck; and 77% in owning a home.
Still, based on a new State of the American Family Study by Massachusetts Mutual Life Insurance Co. (MassMutual), many African Americans don’t have tangible assets needed to make those goals happen now.
The study revealed a disconnect between African Americans’ financial situations and their hope toward the future. The report disclosed some pitfalls tied to African Americans’ personal finances including high debt, low savings and a lower likelihood of wide financial product ownership. In turn, the financial disparities and the wealth gap possibly explain why 31% surveyed are convinced the American Dream may be fading away.
Some key findings from the survey:
- Outside of retirement accounts, only 37% of African Americans own wealth-building products such as stocks and mutual funds.
- Only 35% believe they are doing a good job of preparing for retirement.
- 33% have less than one month of funds saved for a crisis and less than 25% have amassed more than six months’ of emergency savings.
- 58% are actively involved in educating their children on finances versus 48% of Caucasians. Forty-percent rely on family members for information
“The study shows African Americans want to improve their financial situations and are hopeful about the future,” said Evan Taylor, African American market director, MassMutual. “At the same time, it sheds light on the financial struggles and inequities that the African American community continues to battle. Those contradictions indicate a need for greater financial education and discipline for the whole family to achieve economic success. In fact, the biggest financial regret expressed by respondents was that they wished they had started saving and investing sooner.”