By Gary A. Johnson – Publisher, Black Men In America.com
Updated December 12, 2016 (Originally posted on November 5, 2010).
How black people spend their money has been a hotly debated topic not only on this site, but in our office, at social events and in beauty and barber shops across America. As we look at the year in review, this article has been the most read and commented article for 5 years running. Once I learned that this was the most popular and discussed article on the website, I decided to do some research and share this information with others. The first question that I wanted an answer to was: How long does money stay in the community?
A dollar circulates:
So, today, Blacks don’t trust banks, or the courts—Blacks “trust” only that which they can hold in their hands at that very moment. As destructive as that behavior is to Black progress is exactly how profitable that behavior is to whites—who will do anything to keep Blacks on that thinking track.
Hmmmmm! Something to think about.
Another school of thought is shared by bloggerMatthew Corbin who wrote 5 Reasons Why Black People Are Still Broke. Here are Corbin’s 5 reasons:
The 2016 presidential election is over and Donald Trump was the winner. The message to non-Trump voters is: “Suck it up, buttercup.” Some say life under a Trump administration won’t be that bad, in fact, it Donald Trump may do more for blacks than the last several presidents. Time will tell. Trump says he will be great for blacks.
The following information comes from the websiteRacism In America.com. As the largest racial minority in the United States, blacks make up approximately 13.2% of the population, but have a spending power of over one-trillion dollars. So why is it that blacks have the lowest net worth of all racial classes?
During the Civil War, small banks were established throughout the country to be financially responsible for freed and runaway slaves’ deposits. However, many of those individuals lost their money because the banks “lost” their deposits. And after the Civil War, blacks had practically no economic resources, access to capital, or entrepreneurial abilities, making it almost impossible to build, accrue, and pass on wealth. But in an attempt to financially assist soldiers and emancipated slaves with transitioning into “freedom,” Congress established the Freedman’s Saving and Trust Company–a financial institution for blacks. The bank’s objective was to help blacks “increase their financial strength.”
In the 21st century, many blacks still don’t possess bank accounts, but instead rely on check cashing services, prepaid debit cards, and those alike. And living an “all cash” lifestyle allows for more spending and less saving. However, because of the history of being financially defrauded, blacks have grown to rely on tangible items to justify their finances. In other words, many of them feel more secure being able to see and spend their money instead of trusting a financial institution. Consequently, the more items bought and the more expensive items may be, signifies many blacks’ interpretation of their net worth and status as opposed to what a savings account may indicate.
Studies have shown that managing: household expenses and budget, money and debt, investments, and to save for college education are areas that many blacks aren’t financially literate.
In a 2013 survey, Prudential Research reported that 40% of blacks considered themselves to be spenders, 51% savers, and only 9% that actually invest. To this date, blacks only possess 5% of America’s wealth, oppose to whites that own 61%, Asians 28%, and Hispanics 6%.
Therefore, the real reason why blacks spend their money and don’t save is because systematic racism prevented them from safely investing in banks, and is currently impacting their ability to own property, land, or businesses, thus leaving them with nothing to pass down to future generations. They were forced into a mindset of poverty–spend now before it’s gone, impacting them generationally. Historical experiences blinded African-Americans from recognizing the importance of financial literacy and because of their monetary ignorance, blacks possess the least amount of wealth in America.
I decided to post this article as a recent and clear example of how, in this case, this black person spends his money. Why the need to flaunt your money? We’re not in the psychology field, so we won’t even venture to speculate.
A new report from Nielsen, “The Increasingly Affluent, Educated and Diverse,” explores the “untold story” of African-American consumers, particularly Black households earning $75,000 or more per year. According to the report, Black people in this segment are growing faster in size and influence than whites in all income groups above $60,000. And as African-American incomes increase, their spending surpasses that of the total population in areas such as insurance policies, pensions and retirement savings.
According to Nielsen, “African-American households spend more on basic food ingredients and beverages and tend to value the food preparation process, spending more time than average preparing meals. Other popular buying categories include fragrances, personal health and beauty products, as well as family planning, household care and cleaning products.”
The authors of this report emphasize that as the social and cultural clout of the Black consumer is on the ascendancy, it is incumbent upon advertisers and marketers of consumer brands to develop a long-tern game with the Black community.
As The Atlantic notes, Black buying power is expected to reach $1.2 trillion this year, and $1.4 trillion by 2020, according to the University of Georgia’s Selig Center for Economic Growth.
LetsBuyBlack365 is a national grassroots movement that utilizes the online community and local networking to harness Black buying power, with a goal to create jobs and resources to help Black people.
A few years ago we updated our original post with some information from an article written in September 2013, by Stacy M. Brown posted on the Washington Informer.com website titled, “Big Spenders, Small Investors: Blacks Have Little to Show for Hard-Earned Dollars.” In that article, Ms. Brown writes, “If black America counted as an independent country, its wealth would rank 11th in the world. However, African Americans continue to squander their vast spending power, relegating blacks to economic slavery instead of financial freedom, according to several consumer reports detailing the use of cash in the black community.”
We also incorporated 2014 data from the Nielsen Company. If history is any indication of future behavior, this updated article will be hotly debated in 2016. Let’s hope that we can make some progress in this area and close the wealth gap.
Compared to all consumers, African Americans spend 30 percent more of their total income — even though we make $20,000 less than the average household. A whopping 87 percent of annual retail spending consists of Black consumers! But where does our money go?Hudson Valley Press Onlinegives us the scoop via an article from Nielsen’s SVP of public affairs and government relations, Cheryl Pearson-McNeil.
When it comes to shopping at the mall, we make eight more annual trips than any other group pulling in an average of 154 visits. Blacks also patronize dollar stores the most; we make seven more trips than the average group making a total of 20 trips. Lastly, Black Americans made more visits to convenience/gas stores by a small margin: making a total of 15 annual visits.
However, African American trips to grocery stores and warehouse clubs (like Costco) are a bit more scarce. “Less time is spent at grocery stores, with three fewer trips. The exception to grocery store shopping, though, is with Blacks who earn upwards of $100K annually. We also make three fewer trips to warehouse stores and two fewer trips to mass merchandisers than the Total Market. However, more upper-income Blacks (73%) shop at warehouse clubs than non-Blacks annually,” Pearson-McNeil said.
It could be that the lack of grocery stores and other healthy establishments in Black neighborhoods that contribute to this trend. This is why it’s not at all surprising that African-Americans frequent McDonald’s and Burger King more than other U.S. household.
What you probably won’t see in our carts are diary products such as milk and yogurt. “[T]his could be because many of us are lactose-intolerant,” Pearson-McNeil adds.
But probably the largest retail disparity between African Americans and other groups rests in the hair and beauty industry. We spend about nine times more on hair care and beauty products in comparison to other demographics. “In fact, 46% of Black households shop at Beauty Supply Stores and have an average annual total spend of $94 on products at these stores,” Pearson-McNeil says.
All the aforementioned figures were pulled fromResilient, Receptive, and Relevant: The African-American Consumer 2013 Report. With African Americans approaching $1 trillion buying power, one must wonder why aren’t marketers paying more attention to Black consumer trends.
** The average Black household contains 2.57 persons. In addition, Black households averaged 1.25 owned vehicles. Most of these households were renters, living in apartments or flats.8 Their dwellings averaged 5.45 rooms (including finished living areas and excluding all baths) and 1.49 bathrooms. Black households’ annual expenditures averaged $36,149, which was 79.8 percent of their average income before taxes. The amount spent on housing ($13,530) consumed the biggest portion of annual expenditures, accounting for more than one-third of the total. This was followed by transportation ($5,946) and food ($5,825). The remaining expenditures made up roughly 30 percent of total spending: personal insurance and pensions, healthcare, entertainment, cash contributions, apparel, and education, in addition to personal care, tobacco, alcohol, reading, and miscellaneous expenditures.
Black Americans are just 13 percent of the U.S. population, and yet, we’re on trend to have a buying power of $1.4 trillion by 2019. A new Nielsen study hints that marketers may want to start developing a better consumer-producer relationship with African Americans if they want to make big bucks.
Titled “The Multicultural Edge: Rising Super Consumers,” the report finds that the Black American sweet spot, in terms of buying power, lies in ethnic hair and beauty aids (surprise, surprise). African-American dollars make up a whopping 85.8 percent of the industry.
Updated December 12, 2016 (Originally posted on November 5, 2010).
How black people spend their money has been a hotly debated topic not only on this site, but in our office, at social events and in beauty and barber shops across America. As we look at the year in review, this article has been the most read and commented article for 5 years running. Once I learned that this was the most popular and discussed article on the website, I decided to do some research and share this information with others. The first question that I wanted an answer to was: How long does money stay in the community?
A dollar circulates:
- 6 hours in the Black community
- 17 days in the white community
- 20 days in the Jewish community
- 30 days in the Asian community
- tobacco $3.3 billion
- whiskey, wine, and beer $3 billion
- non-alcoholic $2.8 billion
- leisure time spending $3.1 billion
- toys, games, and pets $3.5 billion
- telephone services $18.6 billion
- gifts $10 billion
- charitable contributions $17.3 billion
- healthcare $23.6 billion
So, today, Blacks don’t trust banks, or the courts—Blacks “trust” only that which they can hold in their hands at that very moment. As destructive as that behavior is to Black progress is exactly how profitable that behavior is to whites—who will do anything to keep Blacks on that thinking track.
Hmmmmm! Something to think about.
Another school of thought is shared by bloggerMatthew Corbin who wrote 5 Reasons Why Black People Are Still Broke. Here are Corbin’s 5 reasons:
- Black people spend more money than the make
- Black people don’t support black businesses
- Black people don’t save their money
- Black people don’t know how to invest
- Black people aren’t working towards getting out of poverty
The 2016 presidential election is over and Donald Trump was the winner. The message to non-Trump voters is: “Suck it up, buttercup.” Some say life under a Trump administration won’t be that bad, in fact, it Donald Trump may do more for blacks than the last several presidents. Time will tell. Trump says he will be great for blacks.
The following information comes from the websiteRacism In America.com. As the largest racial minority in the United States, blacks make up approximately 13.2% of the population, but have a spending power of over one-trillion dollars. So why is it that blacks have the lowest net worth of all racial classes?
During the Civil War, small banks were established throughout the country to be financially responsible for freed and runaway slaves’ deposits. However, many of those individuals lost their money because the banks “lost” their deposits. And after the Civil War, blacks had practically no economic resources, access to capital, or entrepreneurial abilities, making it almost impossible to build, accrue, and pass on wealth. But in an attempt to financially assist soldiers and emancipated slaves with transitioning into “freedom,” Congress established the Freedman’s Saving and Trust Company–a financial institution for blacks. The bank’s objective was to help blacks “increase their financial strength.”
In the 21st century, many blacks still don’t possess bank accounts, but instead rely on check cashing services, prepaid debit cards, and those alike. And living an “all cash” lifestyle allows for more spending and less saving. However, because of the history of being financially defrauded, blacks have grown to rely on tangible items to justify their finances. In other words, many of them feel more secure being able to see and spend their money instead of trusting a financial institution. Consequently, the more items bought and the more expensive items may be, signifies many blacks’ interpretation of their net worth and status as opposed to what a savings account may indicate.
Studies have shown that managing: household expenses and budget, money and debt, investments, and to save for college education are areas that many blacks aren’t financially literate.
In a 2013 survey, Prudential Research reported that 40% of blacks considered themselves to be spenders, 51% savers, and only 9% that actually invest. To this date, blacks only possess 5% of America’s wealth, oppose to whites that own 61%, Asians 28%, and Hispanics 6%.
Therefore, the real reason why blacks spend their money and don’t save is because systematic racism prevented them from safely investing in banks, and is currently impacting their ability to own property, land, or businesses, thus leaving them with nothing to pass down to future generations. They were forced into a mindset of poverty–spend now before it’s gone, impacting them generationally. Historical experiences blinded African-Americans from recognizing the importance of financial literacy and because of their monetary ignorance, blacks possess the least amount of wealth in America.
I decided to post this article as a recent and clear example of how, in this case, this black person spends his money. Why the need to flaunt your money? We’re not in the psychology field, so we won’t even venture to speculate.
A new report from Nielsen, “The Increasingly Affluent, Educated and Diverse,” explores the “untold story” of African-American consumers, particularly Black households earning $75,000 or more per year. According to the report, Black people in this segment are growing faster in size and influence than whites in all income groups above $60,000. And as African-American incomes increase, their spending surpasses that of the total population in areas such as insurance policies, pensions and retirement savings.
According to Nielsen, “African-American households spend more on basic food ingredients and beverages and tend to value the food preparation process, spending more time than average preparing meals. Other popular buying categories include fragrances, personal health and beauty products, as well as family planning, household care and cleaning products.”
The authors of this report emphasize that as the social and cultural clout of the Black consumer is on the ascendancy, it is incumbent upon advertisers and marketers of consumer brands to develop a long-tern game with the Black community.
As The Atlantic notes, Black buying power is expected to reach $1.2 trillion this year, and $1.4 trillion by 2020, according to the University of Georgia’s Selig Center for Economic Growth.
LetsBuyBlack365 is a national grassroots movement that utilizes the online community and local networking to harness Black buying power, with a goal to create jobs and resources to help Black people.
A few years ago we updated our original post with some information from an article written in September 2013, by Stacy M. Brown posted on the Washington Informer.com website titled, “Big Spenders, Small Investors: Blacks Have Little to Show for Hard-Earned Dollars.” In that article, Ms. Brown writes, “If black America counted as an independent country, its wealth would rank 11th in the world. However, African Americans continue to squander their vast spending power, relegating blacks to economic slavery instead of financial freedom, according to several consumer reports detailing the use of cash in the black community.”
We also incorporated 2014 data from the Nielsen Company. If history is any indication of future behavior, this updated article will be hotly debated in 2016. Let’s hope that we can make some progress in this area and close the wealth gap.
Compared to all consumers, African Americans spend 30 percent more of their total income — even though we make $20,000 less than the average household. A whopping 87 percent of annual retail spending consists of Black consumers! But where does our money go?Hudson Valley Press Onlinegives us the scoop via an article from Nielsen’s SVP of public affairs and government relations, Cheryl Pearson-McNeil.
When it comes to shopping at the mall, we make eight more annual trips than any other group pulling in an average of 154 visits. Blacks also patronize dollar stores the most; we make seven more trips than the average group making a total of 20 trips. Lastly, Black Americans made more visits to convenience/gas stores by a small margin: making a total of 15 annual visits.
However, African American trips to grocery stores and warehouse clubs (like Costco) are a bit more scarce. “Less time is spent at grocery stores, with three fewer trips. The exception to grocery store shopping, though, is with Blacks who earn upwards of $100K annually. We also make three fewer trips to warehouse stores and two fewer trips to mass merchandisers than the Total Market. However, more upper-income Blacks (73%) shop at warehouse clubs than non-Blacks annually,” Pearson-McNeil said.
It could be that the lack of grocery stores and other healthy establishments in Black neighborhoods that contribute to this trend. This is why it’s not at all surprising that African-Americans frequent McDonald’s and Burger King more than other U.S. household.
What you probably won’t see in our carts are diary products such as milk and yogurt. “[T]his could be because many of us are lactose-intolerant,” Pearson-McNeil adds.
But probably the largest retail disparity between African Americans and other groups rests in the hair and beauty industry. We spend about nine times more on hair care and beauty products in comparison to other demographics. “In fact, 46% of Black households shop at Beauty Supply Stores and have an average annual total spend of $94 on products at these stores,” Pearson-McNeil says.
All the aforementioned figures were pulled fromResilient, Receptive, and Relevant: The African-American Consumer 2013 Report. With African Americans approaching $1 trillion buying power, one must wonder why aren’t marketers paying more attention to Black consumer trends.
** The average Black household contains 2.57 persons. In addition, Black households averaged 1.25 owned vehicles. Most of these households were renters, living in apartments or flats.8 Their dwellings averaged 5.45 rooms (including finished living areas and excluding all baths) and 1.49 bathrooms. Black households’ annual expenditures averaged $36,149, which was 79.8 percent of their average income before taxes. The amount spent on housing ($13,530) consumed the biggest portion of annual expenditures, accounting for more than one-third of the total. This was followed by transportation ($5,946) and food ($5,825). The remaining expenditures made up roughly 30 percent of total spending: personal insurance and pensions, healthcare, entertainment, cash contributions, apparel, and education, in addition to personal care, tobacco, alcohol, reading, and miscellaneous expenditures.
Black Americans are just 13 percent of the U.S. population, and yet, we’re on trend to have a buying power of $1.4 trillion by 2019. A new Nielsen study hints that marketers may want to start developing a better consumer-producer relationship with African Americans if they want to make big bucks.
Titled “The Multicultural Edge: Rising Super Consumers,” the report finds that the Black American sweet spot, in terms of buying power, lies in ethnic hair and beauty aids (surprise, surprise). African-American dollars make up a whopping 85.8 percent of the industry.
