A Race Based View on Money Management

This article originally appeared in BLAC’s April 2011 issue.

.L.A.C. Reader: Are Black folks in general really as bad with handling our finances as we seem? If so, has that long been a part of our history in this country, or are we merely a reflection of how fiscally challenged Americans in general tend to be these days?

Bridgforth:  Take it from someone who has had a client base of 50 percent African Americans and 50 percent Caucasians-when it comes to mismanaging money, we have more similarities than differences.

Regardless of the amount of income a person makes, at the root of most dysfunctional financial behaviors is a common thread. That common thread is self-esteem.

At times we all suffer from self-esteem issues. Whether we are Black, White, Latino, Asian, Native American, male or female, when we are psychologically vulnerable, we allow negative experiences encountered in daily life to whittle away our self-esteem. This can leave us feeling ungrounded and out of sorts. 

We may feel insecure because a mate is emotionally unavailable. We might feel inadequate because our children are rebelling against our authority. One could feel incompetent after being passed over for a promotion at work. To alter our mood or soothe these uncomfortable feelings, some people drink too much, some eat too much and some spend too much.

For example, I once explained this concept during an interview with a national television anchor for a magazine article. Suddenly he said, “That’s very interesting, Glinda. When I feel inadequate, I just buy another house.” Clearly, it is relative when we look at how we spend. Many of us are more inclined to just buy another pair of shoes and call it a day.

The difference between Blacks and people of other ethnicities is the trigger for acting out through our finances and the amount of resources we have to act out with. Dr. Nancy Boyd-Franklin, a psychologist and author of “Black Families in Therapy,” has written: “It is difficult to convey fully to someone who has not experienced [it] the insidious, pervasive and constant impact that racism and discrimination have on the lives of Black people in America today. Both affect a Black person from birth until death and have an impact on every aspect of family life, from child-rearing practices, courtship and marriage, to male-female roles, self-esteem, and cultural and racial identification. They also influence the way in which Black people relate to each other and to the outside world.”

Think about the times when you spend emotionally or impulsively. What is usually going on in your life? Have you been the victim of some form of overt or covert racism? Are you experiencing a high degree of self-criticism and self-doubt? Are you feeling sad, lonely or bored?  It’s times like these when the effects of being bombarded with images of conspicuous consumption from television, magazines and the Internet can overwhelm our sense of financial discipline.

Celebrities can be seen dripping in bling, designer fashions and astronomically high priced cars. Although we have champagne taste like Beyonce and P. Diddy, we have beer budgets that can’t even keep up with the Joneses down the street. And don’t fool yourself-both women and men get caught up in material goods like upscale fashion, luxury cars, electronic gadgets and plasma screen televisions.

Our ancestors were not able to generate considerable wealth in the way other ethnicities did, but some at least left a mortgage-free house to their heirs. I’m not sure our present generation fully appreciates that gift because in some cases they leverage the real estate and create more debt.

This is a great time for you to draw a line in the sand and say, “It stops here.” Now move forward with a financial mindset, goals and action steps to create wealth for future generations of your family.  

GLINDA BRIDGFORTH IS THE AUTHOR OF “GIRL, GET YOUR CREDIT STRAIGHT!” AND FOUNDER OF BRIDGFORTH FINANCIAL AND ASSOCIATES, LLC.

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