The economic downturn has hit everyone pretty hard. But for many African-Americans, uncertain finances and “funny money” are just a way of life.

A new study—the African American Financial Experience—conducted by Prudential found that 60 percent of Blacks have less than $50,000 in company retirement plans (for Whites, the amount was nearly double), and only 23 percent have $100,000 or more.

According to the study, we are also more likely to dip into our retirement funds to get us through rough financial patches and to meet our financial needs, and be more skeptical of building relationships with financial professionals.

The study also found:

  • While 82 percent of African Americans believe maintaining their current lifestyle in retirement is critical, only one-third feel confident they will be able to accomplish this.
  • African American decision makers tend to be more independent learners when it comes to finances, relying on books, financial websites, financial seminars and conferences, and their employers for information.
  • African American women are driving financial decisions in their households. Of the African American women surveyed, 72 percent indicated that they are the primary financial decision-makers in their households and do not share financial decision-making equally. This compares with 69 percent of African American men, and 54 percent of the general population.
  • African Americans are nearly twice as likely to have a dream of starting a small business as those in the general population (35 percent vs. 19 percent), and view starting their own small business as a path to financial freedom. However, more than half of those with an interest in starting a small business say a lack of capital has been the primary hurdle to getting started.

While the savings gap between African-Americans and our White counterparts may be due in part to a gap in wages and our proclivity to help our friends and family through rough financial times, the study shows that many of us are taking steps to plan for the future.

Saving money can be tough, but by implementing a few easy steps you can ensure you’re set when it’s time to retire.

Automate your savings: Nothing makes saving easier than not having to think about it. Whether you save $25 or $2500 per month, make sure the money gets taken directly out of your paycheck or bank account.

Pocket Your Raise: The next time you get a raise (or a bonus) at work, don’t increase your spending, instead bank the extra cash in your retirement account and watch the balance grow.

Do Your Homework: There are a myriad of savings accounts out there from 401Ks to 403Bs, IRAs and annuities. Shop around and find the account, or accounts, that will give you the best return on your investment.

How are you saving for the future, Clutchettes and Gents?


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  • Rastaman

    Well saving is a discipline that too many of us were never taught at an early age and we often have an emotional relationship with money. That fact that one of our slangs for money is “ends” says a lot about how we view money in our community. It should be a means to an end not the “ends”. But that is not the only factor at work, US finanical policy does not encourage saving with the low interest rates paid on most saving accounts you might as well put your money under your mattress because without a certain minimum the banks will erode the account with fees and you will basically be paying the banks to keep your money.

    I believe many of us could use a crash course on finance because there are vast swaths of ignorance surrounding how credit works and other factors that contribute to the bottomline of wealth building. I cannot tell you how many people, some with advance degrees who know close to nothing about organizing their personal finances. A simple things as seeing how someone carries their money around with them gives you an insight as to how they think about their finances.

  • JustSayin…

    Simple: Too many black people have children they can’t afford which makes it almost impossible to save. By the time they reach “real” adulthood which I would say is about age 25, they are saddled down with the responsibility of raising kids.

    • TR

      Cosign 100%. Having children before establishing a career can be financial suicide. Also, there is an opportunity cost associated with time that factors in. Hours spent doing the duties of raising children (cooking, running them to day care, etc.) are hours not spent studying, enhancing skills, or working an extra job. All of that has a compounding effect. Considering the rates of single parenthood it is no surprise many black people can’t save money. This is on top of many other elements we already deal with.

  • WoW

    I like the way survivalist (white folks who live off the grid) save money. They buy those huge bomb proof safes that they use to store their guns and cash.

    I guess I have a different experience in Bay. Everything is soo black and white on here…its getting boring. This area is not soo segregated like most parts of the country, so my views are entirely different. Seems that if you @ least come from a family that has owned real estate and have some assets to pass down to the kids….u start off knowing the value of saving.

  • gotcha

    “wearing it on their back”.. i believe.. some aren’t satisfied unless they have some name brand bag and shoes.. i mentioned the college saving plan 529 for my friend and she told me that was for white ppl.. i said excuse me.. i said so black ppl can’t save for their children college expenses.. she said oh only black ppl w/good jobs.. was not feeling that..