I recently read about a study of finances and women of color, and I noticed a pattern. Why are African Americans least secure, yet more optimistic about their financial future? 

Over the past few years, the studies below show that African Americans are not as actively engaged in developing personal financial plans as others.  Yet, they express optimism about their financial future.  This is wishful thinking. 

Take a look at these studies below.  If these studies reflect your situation, you should make a commitment to improve your financial wellness.

March 2013 -- State Farm Insurance Study of financial security of women of color  http://www.theamericancollege.edu/assets/pdfs/The-Financial-Needs-and-Attitudes-of-Women-of-Color-11-30-2012.pdf

While African American women report feeling the least financially secure, they are also the most hopeful about the future. Only 18 percent of African American women with incomes of $45,000 to under $75,000 feel extremely or very secure, significantly less than the average American women in the general population, who are predominantly Caucasian (26 percent) or Asian women (28 percent) with the same income. 

Yet, 74 percent of African American women expect a brighter financial future as compared with 56 percent of women in the general population, 48 percent of women in the Asian population, and 62 percent of women in the Hispanic population.

December 2012 -- Well Fargo Investor Survey 

https://www.wellsfargo.com/press/2013/20130410_AfricanAmericanInvestorsOptimistic 

"African American investors report high levels of confidence in their financial future, along with optimism about the political and economic future of the country, according to a recent Wells Fargo nationwide survey. Despite proactive planning and intentional cuts in spending, African American investors remain focused on day-to-day living expenses, with a large majority concerned about having enough money to retire." 

Almost three quarters of African American investors (73%) are optimistic about the political direction of the country, significantly higher than the general population (43%), while four in five (83%) feel the U.S. economy will improve in the next two years (compared to 47% of the general population). Seventy-two percent of those surveyed expect their local economy to improve in the next two years (compared to 45% of the overall adult population), and nearly three in four see improvements in their local housing market (71%, vs. 54% nationally). 

Three in five (60%) African American investors express confidence in their own financial future, slightly higher than the national response (52%), while half (52%) report they are better off now than they were three years ago, same as the general population. 

Qualified respondents were non-students, ages 25-75, who are the primary or joint financial decision-maker in the household with household investable assets of at least $10,000. 

February 2009 -- Nationwide Insurance study of personal financial planning:  http://www.nationwide.com/newsroom/022609-TSG-Survey.jsp
While 58 percent of African Americans say they think their financial situation will improve in the next year, most of those surveyed indicated they are not taking deliberate actions to better their financial circumstances:
* Less than half say they are proactive about their financial future
* 3 in 4 say they do not have a written financial plan
* 1 in 3 say they don't know where to start when it comes to personal financial planning

These studies seem to reflect significant disconnects.  While the optimism of African Americans is highest in all of the studies below, we must take a more active role in planning and managing our financial future. 

Please see our earlier article --   Thirty Steps to Financial Wellness -- to begin taking steps toward a strong financial plan for your family.

Roger Madison, CEO

iZania LLC

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