How Do Black People Spend Their Money – 2025 Edition – The Premier Online Magazine for Black Men

By Gary A. Johnson – Black Men In America.com
Updated July 1, 2025 (Originally posted November 5, 2010)

How Black people spend their money has been a hotly debated topic not only on this site, but in our office, at social events and in beauty and barber shops across America. This article has been the most read and commented article for 15 years running. Given its impact, I’ve updated it to reflect current realities and offer fresh insights. At the time of this update (July 1, 2025), Redemption Holdings Co (RHC) is the only Black-Owned Minority Depository Institution (MDI) headquartered west of Texas. Redemption Holding Company acquired Holladay Bank & Trust and renamed it Redemption Bank. This acquisition makes Redemption Bank the first Black-owned bank in the Mountain West region of the United States.

Redemption Holding Company (RHC) is led by former White House Policy Advisor and Small Business Administration Regional Administrator, Ashley D. Bell, with early-stage support by Dr. Bernice A. King– the daughter of the late Dr. Martin Luther King, Jr. and Coretta Scott King. The company is located in Holladay, Utah (Salt Lake City Area).

Gary Johnson – Publisher (Black Men In America.com)

What Black Consumers Say About Money

According to the Pew Research Center, most Black adults are clear on their financial goals:

67% say being debt-free is essential to financial success.
65% want enough money to enjoy life.
Nearly half (49%) see home ownership as crucial, while 44% emphasize passing down assets and 43% want multiple income streams.

Yet most also rate their current financial situation negatively (64%). Over half worry about money daily, and 28% say they couldn’t cover three months of expenses if they lost their income.

Black Spending Power & Consumer Habits

In 2024, Black purchasing power reached $1.8 trillion, outpacing general U.S. consumer spending at 5% vs. 3% annual growth.
The median wealth of Black families is just $44,900.
Top purchases? Salty snacks, soft drinks, vegetables/herbs.
Black and Hispanic consumers outspend Whites by 30% on clothing, cars and jewelry.
25% of Black consumers prioritize products reflecting their culture.

But there are also deep challenges:

59% say they’ve been mistreated in stores.
Only 33% use mobile banking; 55% are unbanked or under-banked, relying on cash.

And tellingly, Black consumers say they’re willing to shift $260 billion in spending to companies that truly meet their needs.

Where the Money Goes: Spending Priorities

For low-income Black households, spending looks like this (Bureau of Labor Statistics):

Housing – 45.5%
Food – 23.5%
Transportation – 11.5%
Healthcare – 4.1%
Entertainment – 3.8%

The Black hair care industry alone is valued at $2.51 billion, with Black women spending 9x more on ethnic hair products than non-Black consumers.

Highlights from “Big Spenders, Small Investors: Blacks Have Little to Show for Hard-Earned Dollars”:

Are We Spending Wastefully?

While there’s no inherent connection between Black people and Lincoln vehicles, there are some interesting trends and historical contexts to consider. Lincoln, as a luxury brand, has been historically associated with certain demographics, including older buyers and those seeking formal transportation like limousines. Additionally, Lincoln has made targeted marketing efforts towards Black consumers, particularly younger generations, which may contribute to perceptions of a connection.

Some surveys and reports suggest that Black Americans, particularly younger generations, show a higher propensity to purchase luxury vehicles, including Lincolns. One report indicated that Black people are 40% more likely to drive a Lincoln compared to other races according to BLAC Detroit.

Serena Williams is the face of the new 2025 Lincoln Navigator. From my perspective, this is a clever marketing move on the part of Lincoln as they are tapping into Williams’ widespread social media influence. Serena is the G.O.A.T. (Greatest Of All Time) of tennis, and a force in fashion, and philanthropy.

According to marketing studies, each year Black Americans spend:

$47 billion on Lincoln vehicles
$3.7 billion on alcohol
$2.5 billion on Toyotas
$2 billion on athletic shoes
$600 million at McDonald’s and fast food chains

Yet only 43.9% of Black Americans own homes (vs. 73.5% of Whites), and most have under $50,000 in retirement savings. Dr. Boyce Watkins put it bluntly: “We don’t use money to invest or produce. When we get our tax refund, we go straight to the store.”

Historical Roots & Systemic Barriers

Here’s something to think about. According toTingba Muhammad of the Nation of Islam Research Organization (NOIRG) wasteful Black spending is rooted in slavery. According to their research 42 million Blacks have a spending power amounting to $1.1 trillion, which gives each man, woman, and child an annual spending power of $26,200 dollars. Blacks spend their money overwhelmingly with white businesses on the following products and services:

Tobacco $3.3 billion
Whiskey, wine, and beer $3 billion
Non-alcoholic $2.8 billion
Leisure time spending $3.1 billion
Toys, games, and pets $3.5 billion
Telephone services $18.6 billion
Gifts $10 billion
Charitable contributions $17.3 billion
Healthcare $23.6 billion

Nation of Islam researchers argue this spending pattern is rooted in history: after slavery, many Black Americans distrusted banks or legal systems. Instead, they trusted only what they could immediately buy and hold. That psychology, they say, was deliberately reinforced by economic oppression.

So, today, many Blacks don’t trust banks, or the courts—Blacks “trust” only that which they can hold in their hands at that very moment. As destructive as that behavior is to Black progress is exactly how profitable that behavior is to whites—who will do anything to keep Blacks on that thinking track.

55 percent of Black Americans are unbanked or under-banked meaning they do not have a bank account or the appropriate bank account. (Federal Deposit Corporation Survey)

Meanwhile, systemic policies still widen the gap:

The Homestead Act excluded Black families from land ownership.
The original Social Security Act left out domestic/agricultural workers — mostly Black.
Redlining blocked Black home ownership.

Result?

76% of Black consumers live paycheck to paycheck.
How Long Does Money Stay in Various Communities?
- Black community: 6 hours
- White community: 17 days
- Jewish community: 20 days
- Asian community: 30 days

How Higher-Income Black Americans Spend

A Merrill Lynch study of Black households earning $125K+ found they:

Focus on supporting family, paying off debt, and preparing for retirement.
Are 5x more likely to financially support parents than other affluent groups.
Invest more in entrepreneurship and unique career paths — yet reinvest only ~$68K into businesses vs. $468K for white counterparts.

Black Elite:

A distinct “black elite” or “black upper class” is emerging, comprised of individuals with high disposable incomes and net worth, including entrepreneurs, professionals, and high-earning individuals in various fields.

A study by Credit Suisse and Brandeis University’s Institute on Assets and Social Policy found key differences in wealth-building approaches:

Wealthy Black Americans are less likely to invest in stocks and bonds, favoring safer assets like CDs, savings bonds, and life insurance.
Black Americans invest more in real estate than Whites—41% of non-primary residence assets versus 22% for Whites.
Black business owners reinvest less in their businesses—$68K on average vs. $468K for White business owners.
White business owners invest 7 times more in their companies despite equal business ownership rates.

Matthew Corbin’s 5 Reasons Why Black People Struggle Financially:

Spending more money than earned
Lack of support for Black-owned businesses
Insufficient savings
Limited investment knowledge
No clear plans to escape poverty

The Church & Black Wealth

No discussion of Black money is complete without mentioning the church.
Since 1980, Black churches have collected an estimated $420 billion in tithes and offerings, an average of $252 million a week. Author Byron Woulard argues: “The money spent tithing could have bought 93,000 homes or paid college tuition for 933,000 students.”

I wonder how many churches in the US have ATM machines on-site? With the swipe of a credit card, you, too, can give to God.

Photo Credit: Mike Hammer – Charlotte Observer.com

Historical Context: “The Secret of Selling the Negro Market”

For a fascinating look at historical perceptions of Black consumer power, check out the 1954 film The Secret of Selling the Negro Market. Created by Johnson Publishing Company, the film was designed to educate white advertisers about the purchasing power of Black Americans. This film shows how Black spending habits were viewed decades ago and invites reflection on how far we’ve come—and how far we still have to go.

So What’s Next? Building Generational Wealth

Experts like Kimberly Anderson-Mutch offer solutions:

—Teach kids about money early.
–Invest in real estate.
–Build businesses.
–Buy stocks & diversify income.
–Write wills & estate plans.

The racial wealth gap isn’t just a historical problem — it’s alive and well in 2025. Despite higher levels of education and entrepreneurship, the typical Black family still holds only a fraction of the wealth of white families. In fact, the gap has widened.

Where We Stand Today

In 2025, the typical Black family still owns just 15 cents for every dollar held by a white family. Wealth is generational. Without an inherited cushion, it is very difficult for Blacks to make any significant financial gains.

Black consumer spending is shaped by economic conditions, cultural values, and systemic barriers. This ongoing series aims to spark discussion, provide resources, and promote financial empowerment.

Some economists have suggested that people invest in state-funded trust accounts for every child. These could reduce the Black-white wealth gap from 16x to just 1.4x. Another suggestion is legislation to support first generation home buyer support in the form of grants or forgivable loans for families without inherited housing wealth. One of the most talked about initiatives is targeted student debt relief since Black graduates carry the highest debt loads.

Final Thoughts

This isn’t about shaming Black spending. It’s about awakening our collective power. If we don’t tackle the roots of this problem, we’ll be updating these same stats in 2035. As a community, we can’t wait — we must build savings, support Black businesses, and push policies that close these gaps for good.

If 42 million Black Americans control $1.1 trillion, that’s $26,200 per person, every year. Imagine what could change if more of that money stayed in our hands, invested in our kids, our businesses, and our future.

If you want to educate yourself and others about how to earn and spend your money responsibly, read the book, Black Dollars Matter: Teach Your Dollars How to Make More Sense, by James Clingman.

There is a great organization called World of Money. Founded in 2005, the World of Money is a New York City based 501(c)(3) non-profit organization whose mission is to empower youth through the engaged, local delivery of professional quality financial education. World of Money Founder and CEO, Sabrina Lamb, while attending a financial planning seminar, was inspired by a compelling question. Are children, in the course of their education and upbringing, getting this information on how to manage their financial life? After conducting some research on the subject, Ms. Lamb found that the answer to her question was a resounding “no”. So, after affirming the detrimental effects of this knowledge gap, she set forth to leverage her experience as an entrepreneur and love of working with children to create World of Money. Click here to visit their website and learn more.

Dr. Bernice A. King, daughter of Dr. Martin Luther King, Jr. and Coretta Scott King, and Ashley D. Bell, CEO, Redemption Holding Company, exemplify the intersection of legacy and innovation. They share the vision of bridging the wealth gap that exists in America today. Ashley Bell and Dr. Bernice A. King co-founded the National Black Bank Foundation, which, since 2020, has directed $600 million in deals to Black institutions. They share the further vision of acquiring non-minority banks to help to reverse the recent decline in the number of Black financial institutions.

Dr. Bernice A. King, Senior Vice President for Impact Banking. Ashley D. Bell, Executive Chairman, Chief Executive Officer, Bank Redemption.

“We think Redemption can be a platform by which we can build something special as the first Black-owned bank in the Rocky Mountains” — Ashley D. Bell, Executive Chairman, Chief Executive Officer