A report shows the median single Black woman has a net worth of just $200, compared to $15,640 for single White women. Credit: Tima Miroshnichenko/Pexels
by ReShonda Tate
Houston Defender
I have to confess. I’m not the best when it comes to money. I’ve had ostrich syndrome most of my life. That’s basically where you keep your head buried in the sand because your finances make you physically ill. I know that sounds crazy, but it’s a real thing. People with ostrich syndrome avoid information that could help them make better decisions or improve their situation. This avoidance can lead to negative consequences, such as financial losses or missed opportunities. If I don’t check my bank account, I don’t have to face how dire things are. The problem with that thinking is it didn’t change the reality. It just delayed me facing it. And by the time I finally faced it, it was five times worse. Thank God for growth.
Over time, I realized that you can’t succeed at what you don’t measure. My bank account was never going to ‘heal thyself.’ I had to take my financial house off self-drive mode, and navigate that bad boy myself.
And it’s not just personally that Black women need to face their finances. In a world where Black women are the fastest-growing group of entrepreneurs, our financial realities tell a different, more sobering story. Despite our strides in education and leadership, we continue to face significant financial disparities that threaten our economic well-being and long-term stability. It’s time to confront this reality head-on and take actionable steps to secure our financial future.
The Financial Landscape for Black Women
Black women make up nearly 14 percent of the U.S. female population, yet our economic struggles are disproportionately stark. According to a 2022 report from the National Women’s Law Center, Black women earn just 67 cents for every dollar earned by White, non-Hispanic men. This wage gap contributes to a median annual income of $41,098—well below the national median of $58,260 for all women.
The racial wealth gap further compounds the issue. A 2021 report by Goldman Sachs revealed that the median single Black woman has a net worth of just $200, compared to $15,640 for single White women. Let me say that again: $200 vs $15,640. This stark disparity reflects systemic barriers such as discrimination in hiring, limited access to generational wealth, and disproportionate student debt burdens. In fact, Black women carry the highest student loan debt of any demographic, averaging $37,558 according to the American Association of University Women.
Our financial challenges aren’t just individual problems; they’re community issues. When Black women—the backbone of our families and communities—struggle financially, the ripple effects are profound. Wealth inequities limit our ability to invest in education, purchase homes, and pass down wealth to the next generation. This cycle perpetuates economic vulnerability, leaving our communities at a disadvantage.
Steps to Financial Empowerment
It’s time to take control of our financial destinies. Here are five steps according to financial analysts I’ve interviewed that every Black woman can take to start building a more secure financial future:
- Prioritize financial literacy: Knowledge is power. Seek out workshops, online resources, and books on budgeting, investing, and wealth-building. Organizations like the National Urban League and Black Women’s Wealth Alliance offer resources tailored to our community. Just like you talk to your girls about the latest reality show, have financial conversations.
- Tackle debt strategically: High-interest debt is a significant barrier to financial growth. Focus on paying down credit cards and student loans using strategies like the snowball or avalanche method. Explore refinancing options to reduce interest rates. Make a list of your debt, including the interest rate. Then tackle the highest first.
- Invest in your future:Start small but start now. Whether it’s a 401(k), IRA, or brokerage account, investing is crucial for building wealth. Remember, time in the market beats timing the market.
- Build an emergency fund:Life is unpredictable. Aim to save three to six months’ worth of expenses in a high-yield savings account to cushion against unexpected financial shocks.
- Advocate for pay equity: Don’t be afraid to negotiate your salary and advocate for equitable pay. Resources like Black Career Women’s Network can provide guidance and support.
Collective Action Is Key
While individual efforts are vital, collective action is equally important. Supporting Black-owned banks and financial institutions can help circulate wealth within our communities. Mentorship and networking groups can provide guidance and opportunities for financial growth. Also, pushing for systemic changes—such as student loan forgiveness and pay equity legislation—can address the structural barriers we face.
A Call to Action
Like a lot of Black families, but my mother didn’t teach me alot about savings growing up. She was too busy struggling to make ends meet herself. I found myself repeating that cycle with my own children…until I knew better. Then I started doing better. We have to break the generational cycles surrounding money. Our parents did the best they could. It’s up to us to now do better.
Black women have always been the architects of resilience and innovation. Now, we must channel that same energy into our financial empowerment. Let’s commit to breaking the cycles of economic inequality and building a legacy of wealth for ourselves and future generations. The journey may be challenging, but together, we can rise above the obstacles and thrive.
The time is now. Let’s get our financial house in order.
(This post was originally published on Defender Network)
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