Black Financial Literacy: Lessons You Should Teach Your Child
Everyone always says that the school is your children’s second home; it is where they earn their education, learn about various subjects, and sharpen their academic and interpersonal skills. The school—and education, in general—is the foundation of your children’s future. School is the training ground that prepares them for life. But do you think that’s enough?
Beyond the Confines of a Classroom
“Education is key to the future.”
Yes, education is an essential part of every child’s life. Through education, they are given a greater chance of having a brighter future ahead of them. However, what they learn inside the classroom is not enough—they also need to know how to run their lives and steer them towards the direction they want.
Schools offer a bit of preparation for the real world, but it doesn’t teach everything, especially not in regard to money. They may have discussed adding and subtracting a few dollars in Math class—but do you think they are taught how to handle money? If not in school, where do you think they will learn that from? At what age will they be able to understand matters about money?
The Dangers of Financial Illiteracy
Ignorance is not bliss, especially when it comes to money matters. The lack of financial education makes your children more vulnerable to being buried in debt, becoming bankrupt, missing opportunities, and making wrong decisions. Letting them live their adult lives while knowing nothing about money will only leave them at a disadvantage.
Overcoming the Racial Gap
The black-white financial gap is real—Black Americans find it more challenging to build their wealth. The Federal Reserve reported in 2019 that the average Black family earns less than 15 percent than that of the average White family.
The financial gap between Black and White Americans is caused by a combination of privilege, systemic and racial inequality—and the lack of education just makes surmounting that even harder. As such, black financial literacy is vital to closing this gap.
Although the gap is big and wide, there is a chance of overcoming it by teaching the children about money in Black families. Learning about money at a young age increases your children’s chances of securing wealth and building financial wellness.
Teaching Your Black Children About Money
Information is power. Teaching your children about money as early as possible makes it easier for them to build a successful life and grab more opportunities that they wouldn’t have otherwise. Here are a few lessons about money that your child should know learn about:
Wants and Needs
Kids should first learn the difference between wants and needs. This helps them gain perspective on what should be given importance and what they can give up.
Help your child set their savings goals. Once they’ve figured out what to save for, they’ll think about how long it would take and how much money they should set aside so they could reach that goal. You can also provide them with a safe place to save, like a piggy bank or a bank account once they’re older.
Teach your child the importance of budgeting by showing them how you allocate your money. Not everything they want, they can get—let them know that you can spend only a specific amount of money on a particular thing to spend more on something more important.
Black financial literacy is essential to overcome the financial gap and secure a promising future for your children. Learning about money matters as early as possible teaches them to save and be disciplined and responsible. Once they’re much older, you can introduce them to financial advisors or lead them to informational personal finance websites to learn more about money management.
Let blackwallet help you become financially literate! blackwallet is a top personal finance blog that’s about empowering urban millennials with the tools and strategies to leverage their finances. We can provide you with tangible financial literacy tips you can use to build wealth. Visit our website and check out our guides and start adding more commas to that savings account!