Bridging the Racial Gap in Financial Literacy
Many factors contribute to the racial wealth gap, including lack of access to a financial education that can help families make ends meet. The racial wealth gap is structural, but financial education is still crucial. At Real Secrets of Money™, we highlight the importance of financial literacy, especially since Experian reports that 76% of Gen Z students wish they had personal finance classes in school. While structural and political solutions are necessary to solve the full problem, bridging the racial gap in financial literacy can start by offering personal finance courses in schools and providing more access to free online resources.
Experian reports 76% of Gen Z students wish they had personal finance classes in school.
A study from FINRA found that financial literacy rates were lopsided when split by racial data. White and Asian-American test-takers scored higher on basic financial assessments than Black and Latinx test-takers — a pattern that persisted across age groups. Similar factors that cause the gender gap in financial literacy may also play a role in the racial wealth gap. Socioeconomic barriers, such as higher rates of unemployment and less access to wealth-building resources, further limit minority groups from receiving proper financial education.
Financial Education in Schools Can Help
Traditionally, lack of financial education was attributed to a lack of personal responsibility and parental guidance. However, recent data suggests that of the five primary sources for financial education — high school, college, family, employer and the military — there are structural hurdles that disproportionately affect non-White families’ abilities to teach financial skills at home. The racial gap holds even when parents provide financial education, suggesting that at-home teaching is less effective for minority groups than for White families. Meanwhile, financial education from high schools and employers offers the same benefits across the racial divide.
Experts recommend closing the racial wealth gap by teaching financial literacy in schools and providing access to financial counselors. The U.S. Financial Literacy and Education Commission proposed tailoring financial education to communities in need, as this focus helps motivate people to learn essential financial strategies. Providing financial education in schools can protect our most vulnerable communities, a key focus of Real Secrets of Money.
Experts recommend closing the racial wealth gap by teaching financial literacy in schools and providing access to financial counselors.
Financial Education is Out There
At Real Secrets of Money, we believe that the right financial resources can make a significant difference in helping minority communities approach long-term goals like increasing financial literacy and building personal wealth. We offer free digital tools and resources that can empower communities to take control of their financial futures while structural changes promote equal access to financial health.
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Discover more ways to boost financial literacy with Real Secrets of Money. Visit our blog for free financial resources, tools and insights. Connect with a financial literacy teacher today and start your journey toward financial empowerment.
