(Springfield, MA) – As the country wraps up Black History Month celebrations, a study shows that African-Americans in the U.S. are optimistic about their financial future, with 41 percent saying they are very good at managing money and 30 percent saying they are confident selecting investment options. Most still solidly believe in the American Dream. Only 28 percent indicated that they believe the American Dream is disappearing, versus 40 percent of the general population who held that more pessimistic view, according to the findings of Massachusetts Mutual Life Insurance Company’s (MassMutual) third biennial 2013 State of the American Family Study, which offers a broad snapshot of Americans’ financial views.
The study shows that along with their increased optimism, African-Americans express a greater desire to be actively involved in all of their financial decisions (80 percent versus 69 percent in the general population), want their children to be educated about finances and to avoid burdening their children when age prevents them from caring for themselves.
• Half are actively involved in educating their children about finances
• More than any other group surveyed, African-Americans wish that their parents had taught them more about finances and four-in-ten are actively seeking ways to educate themselves
• Nearly 70 percent believe it is important that their children aren’t burdened be taking care of them, when they get older.
Yet despite these strong desires to secure the future for themselves and the next generation, in some respects, African-American families are struggling financially more than the general population.
• Nearly half have less than three months’ worth of expenses set aside for an emergency.
• They carry a greater amount of debt compared to the general population: Almost three-quarters have credit card debt, compared to slightly more than half of the general population. Student loans are held by 28 percent. Three quarters have mortgages, with nearly 30 percent owing more than their homes are currently worth.
• They are least satisfied with their current financial situations (14 percent compared to 27 percent).
“The first step in securing their financial futures for African-American families is understanding where the gaps are,” said Evan Taylor, head of African-American markets for MassMutual, “and then developing a realistic plan to bridge those gaps—one that they can stick to. With so many competing priorities--from the day-to-day expenses, paying off debt, educational funds and saving for retirement--it is recommended that African-American parents get help from a trusted and qualified financial professional who can help them put a strategy together to secure the financial future for them, their families’ and next generations.”
Parents also may want to get help educating their children about finances. Look for programs in local communities sponsored by trusted brands, such as MassMutual’s FutureSmart Challenge, devoting over $1 million in 2014 to reaching more than 10,000 middle school students across the country through an interactive financial education tour. Educational sessions are held in local arenas where NBA teams play and hosted by award-winning actor and best-selling author, Hill Harper.
Taylor offers the following tips to help African-Americans ensure their finances are on the right track:
Take Charge of Your Household Finances: Sign up for free financial resources, but while these tools can provide needed financial education, work with a financial professional to help secure your family’s financial future.
Manage Credit Card Debt: Revise your budget and allocate more money to pay off debts; pay off your highest-interest-rate debts first.
Teach and Prepare Future Generations about Finances: Play board games or smartphone applications with your children, or engage them in activities that have a monetary component.
Start Thinking about Retirement (If you’re not already): Start thinking about current and future expenses to determine if you are saving enough to meet your goals.
To learn more about African-American families from the 2013 State of the American Family Study, visit http://www.massmutual.com/soaf.
The State of the American Family Study is a biennial survey conducted in 2009, 2011 and 2013 for MassMutual by the Forbes Consulting Group, LLC. The 2013 study was conducted between February 4 and 25, 2013 via a 20-minute online questionnaire. The survey comprised 1,337 interviews with American households with children under age 18 for whom they are financially responsible. Interviews were conducted among men and women aged 25-64 as of 2013 with household incomes greater than $75,000 (50 completes were allowed among 25-32 year-olds with HH incomes falling between $50,000 and $75,000). Respondents had to contribute at least 40% to decisions regarding financial matters in their household to qualify. Results were weighted to the 2010 US Census distributions for age, gender, ethnicity, region, and same sex married/partnered couples to be representative of American families in this age and income bracket. This study includes trending data for survey waves conducted in 2009 and 2011.
Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyowners consistently since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.
MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.