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Where Do Most Black Women Spend Their Money?
By Daryl C. Hannah
September 23, 2008
Keywords: Black women, spending, financial institutions, ING, consumer habits, diversity, discrimination, Wall Street, religious institutions, financial literacy
Mounting pressure from a tight economy has most Americans changing their spending habits on everything from education to healthcare needs. But there is one group that remains steadfast in its spending habits despite the crumbling economy: Black women.
According to a new study by ING, as much as 68 percent of Black women say they buy what they want in a good or bad economy. A staggering 41 percent say they feel guilty about how much they spend on expensive brands.
"What we have here is a financial perfect storm," says Rhonda Mims, president of the ING Foundation and senior vice president of ING's Office of Corporate Citizenship & Responsibility. "An inclination to spend combined with an extraordinary desire to help others financially has left many Black women behind the curve in terms of savings."
The study, which asked 1,000 professional Black women and 454 non-Black professional women about their spending habits, found that 40 percent of Black women shop to cheer themselves up. Black women are also more likely to shop impulsively.
"For some Black women, excessive spending makes the road to long-term financial security even longer," Mims says. "To an extraordinary degree, Black women consider themselves trendsetters and centers of influence. Opinion-leading has its price."
Some accounts view the issue slightly differently. "A lot of these purchases are made on credit," says She-Lia Henry, controller for DiversityInc and president of the southern New England Westchester Chapter of National Association of Black Accountants (NABA). "And when things are bought on credit, you don't take the economy into consideration."
Henry hasn't bought anything for herself in more than two months. But her selfless spending is not unusual. Black women are also contributing healthily to their families and religious institutions.
More than half of the Black women surveyed say they've lent $500 or more to a friend or to family in the last year; one-third say they've loaned upwards of $1,000.
"Black women's sense of obligation to community and family is both extraordinary and commendable," Mims says. "But when you are pulled in so many directions financially, something or someone has to pay the price. For Black women, it appears their financial well-being suffers."
Unfortunately, that sense of obligation has adversely affected Black women's ability to save.
Among the Black women surveyed, 66 percent say they own a retirement account, compared to 79 percent of all other women; 28 percent say they own individual stocks and bonds, compared with 52 percent of all other women; and 23 percent say they own mutual funds, compared with 39 percent of all other women.
"Many were not taught good financial habits," says Henry. "The African-American community spends more than any other ethnic group." For many Blacks, budgeting is either not a high priority or is not done correctly.
Among those surveyed, 72 percent of Black women said they strongly agreed with the statement "I wish I had learned more about money and investing growing up."
It's unclear whether recent Wall Street events will curb spending habits for Black women, especially as some 85,000+ face unemployment. But if there is a change, according to some analysts, it won't be from an expensive brand to a generic brand--it will be from an expensive brand to nothing at all.
Readers' Comments
Posted: Monday, Oct 27, 2008
Where Do Most Black Women Spend Their Money?
Excellent article. I'm always interested in ways to save. I no longer buy expensive articles and clothing. In fact I now only wear black & white. saves me a lot of money and saves energy as to what to wear and trying to buy all types of colors in clothing and shoes. I love it. Now if only I can stop trying to take care of everyone else, sons, and family. Also I shop at slightly used clothing stores. But sticking to wearing black & white, I really don't need as many clothes.
Mildred Lash
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Posted: Tuesday, Oct 14, 2008
Where Do Most Black Women Spend Their Money?
I sent this to every black woman whose email address I have because this information is valid (I'm black myself). I've talked to who are in leadership and do community work have encouraged people to do business as usual and "not participate" in this recession. That is so realistic, I'm glad this article is making people aware that their financial decisions today will affect their outcomes tomorrow. This article praises black women as well as comments on how our positive attributes of helping family is also our financial downfall. This website addresses most cultures regularly so I don't feel this article puts us under a microscope. This needed to be said. And much credit to the site for addressing different cultures, it makes me feel included. I'm so tired of seeing "us" with big diamonds, car notes and no money in the bank. Sisters (of all cultures) let's be real and take heed to what the article says. Good article.
Sandy Benson
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Posted: Sunday, Oct 12, 2008
Where Do Most Black Women Spend Their Money?
I agree that this is not an issue that has anything to do with what color you are. A lot of spending done by women is done emotionally. When things are not going well or there are issues in life that need to be addressed women tend to see shopping as a quick fix. We buy things that we don't need but make us feel better during whatever we are dealing with. Buying expensive purses, shoes, or perfume has made me feel better on several occasions. It wasn't until I ran out of places to put the new purses,shoes and perfume that made me realize that my spending was out of control. I am a middle aged woman who has started some savings for the future but no nearly enough to maintain the spending habits that I had in the past. Shopping is fun and I don't intend to ever stop all together but everything should be done in balance. We cannot depend on others to take care of us when we are no longer able to work so always save some money to spend later.
Darlene Henderson
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Posted: Thursday, Oct 09, 2008
Where Do Most Black Women Spend Their Money?
I saw myself in the findings. For example, I am an impulsive spender. And I will deny myself to give to others. Now, at 54 years old, I'm finally realizing that no one will care for me but me. Preparing to take care of myself actually lessens the burden others might have to bear.
Afi Scruggs
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Posted: Thursday, Oct 09, 2008
Where Do Most Black Women Spend Their Money?
I am in total agreement with the first comment. I am sick and tired of these articles about what black women or black men do in comparison with the rest of the world. I never see articles on what asian people do. What latino people do. What white people do. What american Indians do. Why are we always under a microscope? And who are these people that are used for these studies? I, and majority of the black people I know and encounter on a daily basis are extremely savvy with our finances. We save, invest and work to build wealth just like anybody else. These type of articles are unfair and only continue to perpetuate the stereotypes that we see on TV and hear on the radio. I am absolutely disgusted and wish the media would get their facts straight before publishing such nonesense.
Suzanne M
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