[Steeltrap]

'Black America Saves' Initiative Heats Up

Posted Aug. 30, 2002 -- Financial experts keep pounding the message that saving and investing is vital to the future of Black Americans. If you don't yet get it, here are some numbers that might drive the point home for you:

Black net wealth equals $15,500, compared to $71,700 of net wealth accumulated by other Americans, according to a new study of federal data by the Consumer Federation of America (CFA) and BET.com. The study, released today, analyzed figures from the Federal Reserve Board's 1998 Survey of Consumer Finances. In other words, minus debts, deductions and expenses, this is the amount the average Black household has stowed away.

"Black wealth is a new concept for our community," says Debra L. Lee, president and COO of BET, which recently partnered with BET.com and the Consumer Federation of America to launch the new "Black America Saves" campaign. "[Wealth] is a concept that's uncomfortable for us."

The "Black America Saves" initiative is what the groups hope will ease African Americans into a regular saving routine, and ultimately reduce this dramatic wealth gap. Those who join submit a saving goal and receive free information about saving tools and options, a free subscription to the American Saver newsletter, and free financial advice by phone or Internet. So far, some 1,000 users from all over the country have enrolled. [See link at left.]

"The message, 'You Can Build Wealth,' is something that would surprise many people," says Stephen Brobeck, CFA's executive director. "We are trying to communicate that Blacks can build wealth as well. The things that will make a difference are patience, smarts and discipline. There has to be a mental aspect to this."

While the Fed report on Black wealth appears gloomy, there has been substantial growth in savings among African Americans over the past 10 years, showing an increase of 321 percent. But, proportionately more Blacks than others are what analysts call "wealth-poor," or those with a net wealth of less than $10,000.

Experts attribute these numbers to differing attitudes and financial behaviors. By and large, Blacks fail to plan for retirement and college. Many, 24 percent, spend more than they make, and 32 percent don't save. But other cultural factors come into play, many say.

"I think this is the first generation of African Americans who are familiar with wealth and many are using that wealth to take care of each other," says Marvin J. Owens Jr., director of housing and community economic development at the National Urban League. Both the Urban League and the NAACP have thrown their support behind the Black America Saves initiative. "Also, other Americans have been passing on wealth to each other for generations" so many of us are starting at a disadvantage, he said.

Program supporters say the key to changing the way African Americans view money is information. Both BET.com and BET are keeping the topic fresh with stories and programs about home buying, entrepreneurship, saving, and investing, and other means to building wealth.

"I think a lot of it is education and getting people to think on these terms," Lee says. "There's something about the Internet that makes people want to participate. I hope what BET.com and the network is doing will have a big impact."