Exploring differences in African-Americans’ financial well-being based on financial security factors

Abstract

What impacts the financial well-being of African Americans, compared with other ethnic groups, has been a mystery beyond basic socio-economic factors. However, when explored through the lens of homeownership and employment, two variables that have been latent due to historical racism, African Americans fare far worse than other ethnic groups. This study utilized data from the 2016 National Financial Well-Being Survey (NFWBS) including the CFP Financial Well-Being Scale, and specifically targeted middle-income African Americans. Researchers found that when efforts are made to pull themselves up by their bootstraps through long-term savings, investing, and education, African Americans only show statistical significance if they are middle-income because student loans tend to create a drag on financial well-being levels.