The Need for Financial Literacy for Black Youth

Why We Need to Focus on Financial Literacy for Black Youth

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The I Am King Conference organizers invited me to speak about financial literacy for Black youth this past winter. This conference’s goal was to “identify, understand, minimize and eliminate the marginalization experienced by Black male students in our schools.”

It was one of the most fulfilling things I have ever done. The conference was terrific, and the workshops I presented were something I wish I could have attended when I was a child. Speaking directly to the next generation about the importance of building wealth and managing their finances, I hope, was as helpful to them as it was rewarding to me. 

But this leads to an important question. Is there a difference between financial literacy for back children versus everyone else?

Financial Literacy Is Universal


Regardless of your color, creed, or religion, if you live in a capitalist society, the fundamentals of financial literacy apply to you. When used, they can help you reach a state of both mental and financial wellness. In this state you can pay your bills, have money in case of an emergency, and you are also on your way to reaching your long-term financial goals.

Where things differ is when it comes to some of the additional hurdles that minorities may have to face to reach those objectives.

White and Black Youth Having a Discussion

The Racial Wealth Gap Explained


A wealth gap is a considerable inequity in the distribution of assets between two or more groups. Multiple wealth gaps have formed in most industrialized nations. Wealth gaps between men and women, young and old, and white and Black families have grown significantly in the United States over the last few generations. A wealth gap can be caused by many factors, including gender bias, racial discrimination, and inequitable education policies, to name a few. 

In the United States, there is a significant racial wealth gap. The median non-Hispanic white household had nearly ten times the net worth of the median Black household in 2016, according to a report from the Institute for Policy Studies. That means that, on average, a white family has roughly $171,000 in net worth, while a Black family has just $17,600.

There are many reasons for this disparity. White families have typically benefited from centuries of policies that have granted them advantages over people of color. Beyond slavery and Jim Crow laws, Black people were disadvantaged in housing and other social policies.

The GI Bill is an example of U.S. policy that aided white wealth creation but disadvantaged Black wealth creation. The GI Bill provided money for college education, housing, and unemployment insurance to WWII white veterans, but those benefits were mostly unobtainable to Black veterans. This bill was a boon to most white families and set them on a path of wealth creation. However, with the addition of policies like redlining and limited credit, Black families were often prevented from buying homes, which is the number one method of wealth creation. This situation was made even worse in some cases when the wealth Blacks could create was decimated when they turned to corrupt and unscrupulous rent-to-own scheme (also known as buying on contract). These schemes often left Black families without a home or their capital.  

The racial wealth gap has expanded even further in recent years due partly to the tough-on-crime and drug policies of the 1980s. The disparities continue today, with a significant portion of the Black population incarcerated at disproportionate rates compared to their white counterparts. Today, the wealth gap continues to grow as Blacks fall behind in home ownership, education, and employment opportunities.

Financial Literacy Is Part of the Solution


With so many historical and systematic disadvantages, it is hard to see a path forward. However, one factor that can help combat the inequity that has created the racial wealth gap, is to increase financial literacy among people of color. Unfortunately, due to the education system’s lack of focus on practical life skills, many minorities do not have an opportunity to learn how to manage their money, build assets over time, or build wealth in their communities.

While financial literacy is not a silver bullet that will solve the racial wealth gap, it can help slow the widening gap. Financial literacy can help young people learn how to manage their money and make informed financial decisions. Learning these skills is critical since research shows that financially literate people are more likely to save money and invest in assets, leading to more significant wealth accumulation. In addition, providing financial education for our Black youth is crucial since wealth creation is a long-term process. Creating wealth requires maximizing your earning power, making wise spending decisions, and taking advantage of the compounding of returns and interest over time.

Black Youth Building a Plan

Books About Money for Black Youth

Any money book for kids could be a great start, but why not try to have your kids reflected in the characters that they see?  Here is a wonderful list of money books for kids with black representation.

Financial Literacy Activities for Youth

While I love and encourage reading since I think it is one of the best ways to teach and learn new skills, I recognize it cannot be the only financial literacy activity we provide our children. So here is a list of additional activities for your kids to help improve their financial literacy.

Online Stock Market Games


To grow wealth, we must invest our money safely and wisely. Help your child safely learn about the stock market by playing a free stock market game online.

Stock Market Trend

Online Classes

Having an instructor walk our children through the different components of financial literacy and applying them could be just the thing to help our Black youth get a handle on financial literacy at an early age. Here are a few classes they can take online:

Starting a Business

Not every child will run their own business, but having your child try their hand at being a Kidprenuer can give them a lot of financial literacy experience. From budgeting to accounting, running a small business has transferrable financial literacy skills to help your child manage their budgets.

Play Some Games

Playing games can be a fun and educational way to learn new skills. Kick it ol’school with these classics:

Black Family Playing Monopoly

Give Your Child Money

Giving your child an allowance to practice using their money can be one of the best ways to help them master money skills. There are several apps and prepaid cards, or if your child is nine or younger, you may want to consider sticking to cash. It is easier to manage, and they will learn a lot, from budgeting to how to secure their money. 

If you do decide to use prepaid cards, here are a few that you can consider

There is an app for that.

Many apps and games help you manage allowances, teach kids about the credit system, and everything in between. Here are just a few for you to try.

Help to Build a Brighter Tomorrow

Financial literacy for Black youth is essential to help them build a foundation for a successful future. By learning to manage their money, make wise investments, and plan for their future, Black youth can make strides to close the racial wealth gap and, more importantly, achieve financial stability. Therefore, we must work together to ensure that all Black youth have access to financial education and resources to create a brighter tomorrow for themselves and their families.