Approaching conversations about money can be challenging in any situation. If you bring up this conversation with your employer, your coworkers, and even your parents, it can be a very touchy subject to broach. Growing up, I knew that my mother had the financial means to take care of my siblings and me. However, I do not recall having conversations about money or her teaching me about finances. I remember my mother’s siblings reaching out to her for money and her filling in the gap when they were in need. My teaching moments came from watching instead of talking, and a lot of mistakes that I learned from along away. But was it enough?
We Don’t Talk About Money
In the black community, talking about money is taboo when you have not had access to wealth in the past. After joining the military, I earned about $20K annually and happened to mention this in a conversation with a family member. They said I was not telling the truth and should be more honest about my income. My family member thought that I inflated my income to gain status. I never had another conversation with family members about my income from that point on.
Bridging The Gap
Having conversations with children at a young age can help parents become more comfortable talking about money as they grow. Starting with small life lessons, such as making grocery shopping decisions, can help children understand the value of money and gain self-confidence to make financial decisions. Teaching through everyday life choices can make it easier for parents to talk about money. Children don’t need to know how much parents earn at work or how much money is in a banking account, but answering their questions about money can help them build a positive money mindset.
Money As They Grow
As children grow, the topics parents discuss with them will evolve. According to the 2021 TIAA Institute-GFLEC Personal Finance Index, black financial literacy lags that whites across the eight functional knowledge areas of personal finance. The survey found that African Americans have an increased financial literacy when it comes to borrowing money, and the lowest was in understanding insurance. It’s essential to teach teenagers about credit, loans, and other aspects of borrowing money, to reduce the cycle of debt. Teaching teens at home about loan features and the importance of paying creditors on time can help them understand debt management.
Conquering the cultural barriers African Americans face with financial literacy is ongoing. Low income, little to no inheritance, mistrust of banks, the loss of financial resources due to increased income, and obstacles to employment entry can further reduce the wealth gap. However, the conversation must continue with today’s youth to bridge the gap and prepare them to function in society as financially literate adults. The commitment is for parents, employers, and the government to enhance the black community’s financial literacy, break the stigma about talking about money, and narrow the black wealth gap.
Contributor: Annette Harris, FFC®, Harris Financial Coaching