An alarming number of African-Americans have little or no money saved in retirement accounts and do not own homes, largely because money management has not always been a high priority in a culture that for generations has focused more on "civil" rights than "silver" rights, said Sabrina Lamb, an author and financial literacy educator.
"African-Americans, in general, perform better in the area of spending -- rather than saving -- when compared to any other racial group," said Ms. Lamb, who wrote "Do I Look Like an ATM?: A Parent's Guide to Rising Financially Responsible African-American Children" (Lawrence Hill Books, $14.95).
"The problem stems from the fact that young black people are less likely than their white counterparts to receive money management education in school or from their own parents."
Ms. Lamb's book is a guide for parents who wish to have a meeting of the minds with their children and take inventory of toxic, unconscious spending habits in their households. While the statistics and studies referenced in its 194 pages address issues specific to the African-American community, just about any parent who has struggled with money and wants to raise financially responsible children can relate to its theme.
Ms. Lamb, founder and CEO of New York-based financial literacy education firm WorldofMoney.org, wrote the book based on years of blunt conversations and candid observations of children and parents who have attended her seminars and counseling sessions.
"Parents have come to my Money Matters forums and cried because of the negative experiences they have had with money," she said.
"They remember fathers who didn't save enough to send them to school. They remember being teased by their schoolmates because they didn't have the latest clothes. I'm guiding parents to embrace the negative emotions they are holding to make revolutionary changes in their relationship with money."
Parents sometimes try to give their own children what they believe their parents should have provided for them, but those behaviors could perpetuate a vicious cycle of financial illiteracy and economic insecurity.
The Athens, Ga.-based Selig Center for Economic Growth, which chronicles consumer buying power, reported that by 2012, African-American spending exceeded the gross domestic products of Spain and Canada at $1.1 trillion a year. The top five categories were for goods that have zero appreciative value: rental housing, food, cars, clothing and health care.
According to a 2011 study by Prudential called "The African American Financial Experience," the Great Recession delivered an economic setback to all Americans, but African-Americans may have been hurt to a greater degree than the general population.
During the crisis, they were more likely to lose jobs and to own homes with appraised values that had fallen below what was owed on the mortgage. The Prudential study found six in 10 African-Americans have less than $50,000 saved in company retirement plans and only 23 percent have more than $100,000 in these plans, compared to 34 percent among the overall general population.
The Institute on Assets and Social Policy at Brandeis University in Waltham, Mass., used data from a nationally representative set of 2,000 families tracked from 1984 to 2007 and found that an initial wealth gap of $20,000 between black and white families mushroomed over the 23-year period to $95,000.
Lynnette Khalfani Cox, a former board member of WorldofMoney.org, agrees with Ms. Lamb that a large number of African-Americans have done a poor job in their families and communities of preparing the next generation for financial success.
"In general, African-Americans tend to be more entrepreneurial. We have a sense of self-reliance and in many cases tend to be more family- and community-focused," Ms. Cox said. "These are good things.
"The problem occurs when African-Americans don't establish boundaries or guidelines on the extent they will help family and members of the community."
Ms. Cox, founder of the free financial advice website, AsktheMoneyCoach.com, said African-Americans also have a reputation for giving generously to their churches. That's not a problem but, when combined with other gifts, it can leave them with little to save and invest.
"The problem is when churchgoers give tithes and offering to the church as well as support their adult children and help a sister-in-law with a loan that will not be repaid and pay off a niece's student loan as well," Ms. Cox said. "There is such a thing as giving too much or giving until it hurts, when you are not financially stable to begin with."
Ms. Lamb has been promoting the cause of youth financial education through workshops and speaking engagements across the nation for more than eight years.
Since 2005, she has spearheaded the annual Youth Financial Education Training Institute and Youth Business School in the New York City tri-state area. A former stand-up comedian, she starred in Lifetime Television's "Girl's Night Out."
Ms. Lamb said parents often have trouble schooling their children about finances because of their own core beliefs. Conflicting beliefs about the relationship one should have with money could even stem from church teachings.
"There is nothing righteous about struggling for your financial security," Ms. Lamb said. "It is actually a perfect storm of low self-esteem, lack of knowledge and generational conditioning.
"If we spent $1.1 trillion on land, it would be a different world. We are spending money on things that have zero value. Our children are watching the behavior of the adults and adults are expressing their own vulnerabilities and belief systems with these [misdirected] purchases."
Tim Grant: email@example.com or 412-263-1591