September 2020
Summary: The financial situation of African Americans lags that of the U.S. population as a whole, and of whites in particular. Simple economic indicators illustrate the gap. While 66% of African Americans report that they are doing at least OK financially, the comparable figure among whites is 78%.1 Median household income among African Americans was $35,400 in 2016; median household income of whites was $61,200. African American household net worth was $17,600 in 2016, and 19% had zero or negative net worth; the analogous figures for white households were $171,000 and 9%, respectively. The gap is evident in more nuanced indicators, as well.
This report uses data from the third wave of the TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) to examine the current state of financial literacy among African American adults and the link between financial literacy and financial wellness. Financial literacy is knowledge and understanding that enable sound financial decision making and effective management of personal finances. As such, greater financial literacy contributes to greater financial well-being.