Roadmap to Generational Wealth: Financial Education
What you need to know about Financial Education
According to the Federal Reserve, only 63% of U.S. adults reported that they could cover a $400 emergency expense in 2025. The Federal Reserve's most recent Survey of Consumer Finances also found that Black families held about $44,900 in median wealth while White families held about $285,000. Financial education alone cannot get rid of the racial wealth gap. Creating access to trustworthy financial information as well as wealth-building tools can help families make informed decisions and strengthen their financial security.
The NAACP recognizes the historic and ongoing barriers that have limited Black communities' access to credit, capital, homeownership, investment, and other wealth-building opportunities. We provide financial education and credit-building resources, promoting financial planning and pushing for policies that expand economic opportunities.
How to build a strong financial foundation?
- DO know where your money is going by tracking take-home income, recurring expenses, debt payments, and financial goals.
- DO build emergency savings and automate contributions when possible, so unexpected expenses do not automatically become new debt.
- DO review your credit reports regularly, understand what is being reported about you, and dispute information that is inaccurate or incomplete.
- DO learn the basics of investing, i.e.: risk, diversification, and fees before choosing investments for long-term goals.
- DO understand how taxes, insurance costs, payroll deductions, and workplace benefits affect your actual income and financial decisions.
- DO prepare for generational wealth transfer by keeping financial records organized, naming beneficiaries where appropriate, and learning the basics of wills and estate planning.
Don'ts:
- DON'T turn to payday, after pay or other high-cost loans without understanding the interest, fees, repayment terms, and potential consequences for your finances or property.
- DON'T invest because of social media influence, an unsolicited message, pressure to act quickly, or promises of high or "guaranteed" returns with little or no risk as these are common warning signs of investment fraud.
- DON'T co-sign a loan or open joint debt without understanding that you may become responsible for repayment if the other borrower does not pay