We have all heard it; now we have a study to back it up. Most African Americans do not save their money. According to “The African American Financial Experience,” a study released over the weekend by Prudential Financial, African Americans aren’t saving the way they should. Prudential found that only 20 percent of African Americans believe that they are on track to meet their savings goals for retirement, and nearly twice as many say they haven’t even started.
Even worse, 60 percent of African Americans surveyed have less than $50,000 in company retirement plans, and only 23 percent have more than $100,000. While the recent economic downturn has made saving over the past couple of years difficult, this news is disheartening. With President Obama and Congress debating Social Security and Medicare as we speak, it’s important that everyone has at least a small nest egg just in case those programs disappear. The study also discovered that African Americans are three times more likely to tap into our 401(k) plans during difficult financial times.
When asked they weren’t saving, the respondents answered simply that they don’t have the resources. The study found that African Americans believe that their employers and companies could do a better job of giving advice or information on financial plans to help them save more. They also believed that the financial community as a whole hasn’t effectively engaged the African-American community.
The survey found that African Americans are nearly twice as likely as others to have a dream of starting a small business (35 percent versus 19 percent), and believe this will allow them to have financial stability and freedom. However, they noted that they lacked the substantial funds and capital to make this dream a reality. Everyone can admit that saving money is tough, but it’s key unless you want to pay later. One way you can start is by putting aside the refund that Uncle Sam just sent.
Read more at Prudential.