by Erica Mauter • US News & World Report published an item on its Planning to Retire blog about the different saving habits of white Americans vs African-Americans.
African-Americans and whites who make at least $50,000 annually are equally likely to have access to 401(k)’s and contribute regularly. But blacks save less each month and have smaller nest eggs, according to a new survey [conducted by Charles Schwab Corp. and Ariel Investments].
The post goes on to mention that black investors are more likely to try to time the market and outlines the stated saving priorities of African-American vs white investors, concluding that African-Americans are more concerned with more immediate expenses (college, lifestyle), though both groups heavily prioritize retirement savings.
My first issue is with the title/conclusion. It’s not about race. If they conclude that different groups have differing priorities, it’s about culture. Skin color alone does not determine how one has developed their philosophies around spending and saving money.
On top of that, I wish the article had looked more into why the two groups have differing priorities.
Is it because African-Americans sometimes go a little overboard “keeping up with the Joneses” so as to avoid being looked at as poor?
Is it because African-Americans have a stronger culture of sacrificing themselves for their kids and families? (A recent study talks about how black women give away too much money (via Racialicious).)
Maybe that’s why saving habits are different.