By 
By Gary A. Johnson – Black Men In America.com
Updated December 12, 2024 (Originally posted on November 5, 2010)
How Black people spend their money has been a topic of discussion in offices, at social events, and in beauty and barber shops across America. This article, How Do Black People Spend Their Money?, has been the most-read and commented-on article on this site for 14 years running. Realizing its popularity, I’ve dedicated time to researching and update this content, aiming to provide valuable insights to our audience. Here are a few highlights:
- 25% of Black consumers say they value products that reflect their culture/heritage. The top three most purchased categories by Black consumers are salty snacks, soft drinks, and vegetables and herbs categories.
- According to the U.S. Bureau of Labor Statistics, for low-income Black households, the top five aggregate expenditure share categories were housing (45.5 percent), total food (23.5 percent), transportation (11.5 percent), healthcare (4.1 percent), and entertainment (3.8 percent).
- Black hair care is an estimated $2.51-billion-dollar industry. Black women spend 9 times more on ethnic hair products than non-Black consumers.
- According to a survey by 76% of Black consumers are living paycheck-to-paycheck, including 43% who said they struggle to make ends meet and 33% who report being financially comfortable. Simply stated, 3-in-4 Black Americans living paycheck-to-paycheck.
How long does money stay in the various communities?
A dollar circulates:
- 6 hours in the Black community
- 17 days in the White community
- 20 days in the Jewish community
- 30 days in the Asian community
How Did This Happen?
According to Brian Thompson, a contributor to Forbes.com, the term “systemic racism” ruffles a lot of feathers. It often triggers emotional arguments about how people feel about racism and its effects. Yet concrete data over long periods of time shows very clearly that systemic racism exists.
Blacks were historically prevented from building wealth by slavery and Jim Crow Laws (laws that enforced segregation in the south until the Civil Rights act of 1964). Government policies including The Homestead Act, The Chinese Exclusion Act and even the Social Security Act, were often designed to exclude people of color.
Last year, Janelle Jones wrote and article for the Economic Policy Institute titled “The Racial Wealth Gap: How African-Americans Have Been Shortchanged Out Of The Materials To Build Wealth.”
In her article Jones writes, “Wealth is a crucially important measure of economic health. Wealth allows families to transfer income earned in the past to meet spending demands in the future, such as by building up savings to finance a child’s college education. Wealth also provides a buffer of economic security against periods of unemployment, or risk-taking, like starting a business. And wealth is needed to finance a comfortable retirement or provide an inheritance to children. In order to construct wealth, a number of building blocks are required. Steady well-paid employment during one’s working life is important, as it allows for a decent standard of living plus the ability to save. Also, access to well-functioning financial markets that provide a healthy rate of return on savings without undue risks is crucial.”
The gaps in wealth and income between white and black Americans are stark – and haven’t narrowed significantly in 50 years. Credit Suisse and Brandeis University’s Institute on Assets and Social Policy took a closer look at disparities between whites and Blacks. There are some notable differences in how each group approaches their money. Here are a few:
- The wealthiest 5% of Black Americans are slightly less likely to hold financial assets (stocks, bonds, and so on) in their asset mix. Of the financial assets they do invest in, wealthy Blacks are more likely than wealthy whites to invest in safer assets, preferring CDs, savings bonds, and life insurance to higher risk (and higher reward) assets.
- Wealthy Black Americans have more money in real estate holdings than equally wealthy white Americans. The former hold 41% of their non-financial assets in (non-primary residence) real estate, while the figure for the latter is just about 22%. Adding in primary residences brings those numbers to 57% and 34%, respectively. Even after the housing bust, real estate is considered a lower-risk investment.
- Wealthy Black Americans are less likely to hold equity in business assets. Looking at this group’s non-financial assets, 9% are equity in business assets. That figure is 37% for comparably wealthy Whites. The numbers are similarly stark if you look at this as a percentage of total assets: 21% of the wealthy Whites’ total assets are invested in their own businesses, versus just 6% for wealthy Blacks. Because both groups are equally likely to run their own companies – 23% in both cases – the researchers calculate that this means white business owners are investing in their businesses at a rate 7 times higher than Black business owners. In raw dollar terms, it means that Black business owners have about $68k in their businesses, while White business owners have roughly $468k.
“The American Dream remains out of reach for many African-American and Hispanic families,” said Signe-Mary McKernan, co-director of the Opportunity and Ownership Initiative at the Urban Institute. “Families of color, who will be the future majority population of this country, are not on a firm wealth-building path.”
Additionally, I’ve introduced “Gary’s 10 Tips to Prosperity and Emotional Fulfillment” (see below) to offer actionable strategies for financial growth and well-being.
Key Insights on Black Spending Habits
Corbin’s 5 Reasons Why Black People Are Still Broke
Blogger Matthew Corbin outlines five reasons why financial challenges persist within the Black community. These include:
- Spending more money than earned
- Lack of support for Black-owned businesses
- Insufficient savings
- Limited knowledge of investing
- A lack of plans to escape poverty
Read Corbin’s full explanation for each reason.
While these points spark debate, they offer a starting point for reflection and action.
Here are Corbin’s 5 reasons:
- Black people spend more money than they make
- Black people don’t support black businesses
- Black people don’t save their money
- Black people don’t know how to invest
- Black people aren’t working towards getting out of poverty
Click here to read Corbin’s explanation for each reason.
Building Generational Wealth: Kimberly Anderson-Mutch’s Advice
Kimberly Anderson-Mutch provides five practical steps that Black families can take to create generational wealth:
- Educate children about wealth and its importance.
- Invest in real estate to establish a financial foundation.
- Start a business to create opportunities for legacy wealth.
- Diversify income through stock investments.
- Develop an estate plan to secure wealth for future generations.
These steps emphasize the importance of long-term planning and financial literacy.
Spending Trends Among Affluent Black Americans
A Merrill Lynch study, Diverse Viewpoints: Exploring Wealth in the Black/African American Community, sheds light on the habits of affluent Black Americans (households earning $125,000+ annually). Key findings include:
- Prioritizing family support, debt elimination, and preparing for retirement
- Financially supporting parents five times more than other affluent groups
- A higher likelihood of entrepreneurship and forging unique career paths
The study highlights not only the challenges but also the resilience and strategic planning among this demographic, which has been steadily growing since 2015.
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.
Another great source of information is “How Black/African Americans Pursue—and Define—Success,“ by Diallo Hall, a longtime content strategist and editor whose experience includes serving as Director of Thought Leadership at Fortune and Senior Editor at the Economist Intelligence Unit. In that article you will read about the “Black Rules for Success,” from other successful Black/African American survey respondents.
A Pictorial Slideshow of How Black People Spend Their Money
Let’s continue this conversation. Start by reviewing Gary’s 10 Tips to Prosperity.
The following short video explains the “racial wealth gap” in America.
Final Thoughts
The way Black people spend their money reflects broader economic, cultural, and societal dynamics. This ongoing series aims to foster dialogue, provide resources, and encourage actionable steps toward financial empowerment.
Gary Johnson is the Founder and Publisher of several online platforms, including BlackMenInAmerica.com, BlackBoatingandYachting.com, and others. He is also the author of 25 Things That Really Matter in Life: A Quick and Comprehensive Guide to Making Your Life Better—Today! and a contributing author to The Black Father Perspective: What We Want America to Know and In Search of Fatherhood – Transcending Boundaries: International Conversations on Fatherhood.
In 2019, Gary introduced his own line of spices under the brand MasterChef Gary’s Premium Organic Seasoning. In 2023, Gary shifted his focus from training and consulting to public relations and social media. For more information about Gary’s passions and ventures, visit his official website at Gary Johnson Media.
[…] land, but let’s show them that we’ve kept them in business since the very beginning. It is a known fact that Black Americans spend an estimated of $1.2 TRILLION a year. From June 15th through the 22nd; I propose ALL OF AMERICA, or at the very least my followers and […]
[…] How Do Black People Spend Their Money? (The Racial Wealth Gap) June 22, 2019 […]
[…] The Times article attributes this disparity to distrust of the hospice industry. Perhaps there’s some truth to that, but it’s hard ignore the fact that this goes hand in hand with other high time-preference traits found in blacks, such as not investing and higher crime rates. For example: […]
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[…] Johnson, G. A. (2018, November 12). Updated report: How do black people spend their money? Retrieved March 12, 2019, from https://blackmeninamerica.com/updated-how-do-black-people-spend-their-money-3/ […]
[…] building a business or furthering their business (if they had one.) An excellent article from blackmeninamerica.com reveal that studies show Caucasians on average invest 7 times as much into their businesses than […]
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This is what we really need to focus on thanks for the breath of fresh air…
[…] have great potential to accumulate wealth. And, the first step towards building riches is to save. The annual expenditure of black people is 4 percent greater than any other race despite the fact they have the highest rate of poverty […]
Me I am investing in a Black Owned Company Ztegrity the ZBlackcard let me lay it done. White people want to fee you tii death on prepaid card a lot of black people use. Rushcard was suppose to be for the black community. hey Russell Simmons sold it for millions to Green Dot. Finally a prepaid Mastercard or Visa for the people that buy everything. Of course what makes it special NO FEES what makes it more special Reports to the credit Bureau. What makes this card 3 times special you can have a trade line from $1000 to $10000 for a year to build your FICO scores built in just keep paying. And to top it off for $50 a month Drive your Dream Car. Black people support this CEO he doing it out of Houston TX for us. See More at http://zblackcard/getyours. Oh one more thing, the Zblackcard is all Metal just like an American Express Blackcard that you can’t even get. ENJOY BUY BLACK❤
OMG, so much information to ponder. Are these statistics correct? I have always been a believer in putting money back into your community and this article solidified my reasoning.
This article is truly amazing. It is full of important information and data that should spark African-American “to do for self.” You have gain a new follower. Thanks for all this information!!!
Too much damn information. How many people do you think are going to read this? This article, more concisely stated, could be ten times more effective. You make many solid points however, and I suggest that many of our people are crippled by self-hate and dysfunctional families which is where the battle begins. Tteach us to love ourselves and rebuild our families from the damage done by the well-intentioned section 8. Right now single parent families by race are blacks 62%, latinos 34% and whites 22%. It was not always so and up to 1960 something like 92% of white women had been married at least once by the age of 40 with 86% for black women. So start there, teach self-love, bring the family back and teach financial literacy. Earl Graves (Black Enterprise Mag.) is doing some good work. all this tendency to ostentatious living, bling bling and fast cars is born of self-hate and insecurity.
Too much damn info? The lazy will fall, the strong will overcome laziness and actually read for more than 30 sec.
[…] this episode, we tackle some hard truths about the deep divide between spending habits of Black Consumers and the selling habits of Black Business Owners. The video below is a primer to white business […]
Most mega churches are owned by white board members who teach them how to pimp their own Black people. This is nothing new, it stated during slavery when the white so- called master taught the slave preacher to teach the slaves to be submissive. and never think of running away. The slave Preacher made sure he taught the slaves to love his master more than he love himself. The Negro Preacher could never preach about independence or freedom because he was too scared to even thinking of being away from his white blue eyed oppressor. Today, the Black church is no better. 99.0% of all Black preachers are scared of the word independence or freedom. They all remind me of Fiddler from Roots. When the brave warrior was trying to teach old Fiddler about freedom he said stop that! I don’t want to know nuttin about freedom! The Black preachers today is the modern day Fiddler. They are too scared to build up wealth for the Black community. Most of them have borrowed so much money from the white man bank he probably owned their church and the Black preacher too. They are afraid to be completely free from their white Lord! I bet most of these big and small churches have their account set up at the white man’s bank. Until these Black preachers get that hump out his back, the white man is going to continue to hell! The brother was talking about the night club taking Black people’s money is different because people are aware that they are going into the Lions Den. However, the church make you believe that you are coming into the house of the Savior to be save but really you are being pimped out of you money in the holy name of the Messiah! The only person who wins in these mega churches are the Black Preacher and the man he owes his mortgage to and that’s his modern day slave master- The white bank!!
[…] bloggers and commentators have suggested that the $12 billion to $13 billion per year going to black church […]
[…] bloggers and commentators have suggested that the $12 billion to $13 billion per year going to black church […]
HI JONATHAN, GREAT COMMENT, ALL THIS ARTICLE IF FACTUAL , I THINK THERE MUST BE CHANGE AND FOR BLACK FOLKS TO WAKE UP FROM THERE SLEEP. I’V NOTICE WHILE OUT SHOPPING , WHEN YOU LOOK AT OTHER PEOPLE OF COLOR IN THE FACE, YOU CAN SEE THE SELF HATE THAT HAS BEEN PROGRAMMED INTO SOME NOT ALL, I PERSONALLY THINK WE SHOULD STOP GIVING ALL OF OUR FUNDS TO THE DAM CHURCH AND SPEND IT WITH OTHER BLACK BUSINESS LIKE I DO, IM SELF EMPLOYED WITH 3 DIFFERENT BUSINESS, AND CURRENTLY BUILDING ANOTHER FOR MY KIDS, TEACHING THEM ABOUT KEEPING THERE CREDIT SCORE HIGH, INVESTING IN STOCKS,WEALTH BUILDING THRU REAL ESTATE, PEOPLE SHOULD ALSO CONSIDER INVESTING IN OR ALL OVER THE CARIBBEAN, WHERE WE ALL SHOULD BE SOMETIME OR ALL TIMES OF THE YEAR.
I CAN RECOMMEND SOMETIME THING TO TRY BUT ITS ALL LEFT UP TO THE INDIVIDUAL AND THE MAN/WOMAN OF THE FAMILY..
FIRSTLY WE HAVE TO TRY TO STAY OFF ALL THE FAST FOOD WHICH IS CAUSING OUR BODIES NOT TO THINK CLEARLY, ALL THOSE GMO,HIGH SUGARS FOODS (SYNTHETIC) STUFF.
SECONDLY, SELF EDUCATE IF KEY, GET A INTERNET CONNECTION AND RUN WITH IT, I DO IT DAILY,
THIRDLY: START SMALL SUPPORT YOUR OWN FIRST, I PRACTICE THIS IN MY BUSINESSES AND ITS REALLY HELP , YOU SEE IT IN SALES AND YOU MUST ALWAYS GIVE BACK IN SOME WAY, THE UNIVERSE WILL RETURN IT BACK TO YOU BECAUSE IT KNOWS WHAT YOUR HEART IS DOING, ITS ALL SEEING!!
FORTHLY, WILLINGNESS TO SHARE YOU KNOWLEDGE, TO MANY OF US GAIN THE INFORMATION , GET A LITTLE MONEY AND FORGET ABOUT EVERYONE ELSE, THIS WILL SPELL FAILURE, WHAT WILL YOUR CHILDREN INHERIT . YOU SEE, YOU HAVE THIS GREAT THING INSIDE OF YOU CALLED MELANIN, (CARBON) , ONCE YOU GET TO KNOW WHO YOU REALLY ARE, THE WORLD IS YOURS. TRY IT , IT REALLY WORKS, ITS WORK FOR ME,
LISTEN TO GUYS LIKE THE FOLLOWING, DR. DELBERT BLAIR, JOHN HENRY CLARKE, DR. SABI,MINISTER ENQI, DR. UMAR JOHNSON, DR. LALLIA AFRIKA, DR. BEN JOCHNNEN , PROF IVAN VAN SERTINA, TO L;ONG OF A LIST TO NAME, PROF JAMES SMALL,
BIG PRAISE TO MINISTER ENQI AND KT, THEY HAVE TAUGHT ME SO MUCH, I LIKE TO SHARE THERE NAME , GO TO YOUTUBE FOR MORE INFO, THEY KNOW THE BLACK BODY. THIS IS WHY WE NEED TO CHANGE OUR DIETS
BUSINESS: START SMALL, DO BUYING AND SELLING, SELL SOMETHING,THERE ARE LOTS OF SUPPLIERS ALL OVER THE WORLD LOOKING FOR DISTRIBUTORS, START OFF WITH ONE SAMPLE, JUST LIKE I HAVE STARTED ONE OF MY BUSINESS. KNOCK ON DOORS OF FRIENDS,FAMILY, PEOPLE ON THE STREET, ANYONE, PUT UP A FACEBOOK PAGE, INSTAGRAM IN YOUR COMMUNITY, TRUST ME ,ONCE THE UNIVERSE SEE WHAT YOU ARE DOING, ITS WILL PLACE THE RIGHT PEOPLE IN FRONT OF YOU.
I’LL STOP HERE OR ELSE I CAN WRITE A BOOK, THIS IS JUST THE SELF LOVE FOR MYSELF AND MY FAMILY, SO PEOPLE GET OUT THEIR AND TAKE ON THE WORLD AND BUILD A WEB-SITE, TRY WIX.COM OR VISTAPRINT, DO IT YOURSELF.
AND NO IM NOT GETTING ANY KICKBACK FOR THE LISTED REFERRALS ABOVE.
P.S WHEN YOU READ THE ARTICLE AND THEY TELL YOU THAT YOU ARE SPENDING 18.6 BILLION ON USELESS GOODS, THAT HAS NO FUTURE PROFIT. BOY!!!!!!!!!!!!!
[…] back to the point, think about this for a minute blacks spend about $1.1 trillion a year. This is more money than the wealthiest man in the world is worth. Bill Gates is only worth […]
i find it interesting that the writer mentioned pastors taking people money which this type of behavior is a great minority in the church period and yet the writer did not give the other side of what churches do with tithes which is give to the poor, provide a place of worship which is clean and comfortable for the parishioner. also many churches help members who are in need but there was no mention of this. I might also add by the way how many smokers and drinkers and drug users and ex prostitutes and criminals go to church and change their lives whether you believe in it or not and thus they are not killing, breaking into our homes, selling their bodies, doing drugs anymore and thats ll because they walked into a church one day where the tithes kept the lights on and allowed them a place to go and find help. oh and if you want to know the greatest hustle in our community that takes and gives nothing back its the clubs that we go and pay thousands of dollars in entry fee and drinks only to dance all night and yet they give nothing back to the community. Nike and the tennis shoe industry, the clothing industry etc….
So who ever you are to be so irresponsible to place that statement in your article without looking at all the good the church has done and actually coming up with a comparable dollar amount it has given back to our community is very irresponsible. see all good can’t be calculated in dollars and cents, let me leave you with this which no amount of money can ever equal. this is just one example of this. As a pastor five years ago I met a lady once who was cheating on her spouse and he was not in the church at the time and he believed all the church wanted was people money. What he did not know is the church, was working with his wife to help her overcome her behavior because she loved her husband and didn’t want to do that to him… Through prayer and many days and hours of walking with that person she was able to be delivered from this behavior, this woman found the church one day and wasn’t coming to join but for another reason but instead God helped her. Now you may believe that all the pastors want is the tithe and to get rich but i have you know the average pastor earns less that 28 thousand through pastoring and its a very hard and long hours job. Only 3 percent of churches with more than 1,600 people in attendance pay senior pastors more than $300,000, said Warren Bird, research director at Leadership Network. At the other extreme, a recent study by the National Association of Church Business Administration found that the average American pastor with a congregation of 300 people earns a salary of less than $28,000 a year. I sometimes give my parishoners time set aside for my children and wife because they are in need. I am not angry at you because clearly you are using a lightening rod subject to advance your notion that the church is keeping Blacks poor. I simply want you to do what journalist who actually care about fair and honest reporting are taught to do. get both sides of the subject matter and report them with integrity… by the way that woman has once said to the church God used you to save my life and i think she will tell you that 50 dollars a week to have her marriage back and leave a place for a new soul to come in and get help with the broken part of their life is well worth it!!!!!!!!!!!!!!!!!!!
Hi,
While you can argue that in time past, the church has done so much good (I just finished writing an article about the positive influence the church had during the slave era), in the present day, the objective of the church needs to be evaluated. All the time spent in praying and organizing church events, could be spent in skill capacity building and acquiring more knowledge.
The present day environment reveals that nobody has all the answers. Thus, the church ought to evolve to meet the present needs of the populace rather than depending on it for sustenance. It is my opinion that pastors should work. I currently have the desire to establish a church, so as to help create more inspiring pictures in the minds of the attendees. I aim to instill ambition into them, love, worthwhile values, and push them to contribute their quota here on earth (And God said, “Let us make man in our own image, and let them ‘dominate’ the earth…”).
However, I am working to establish the companies and businesses that would ensure my family is well taken care of, so that I do not have to succumb to receiving an offering/collection in the church. In this manner, the church would be run like a nonprofit. However, every money gotten and spent would be accounted for, and put up on the church website.
We need to do more for our environment than make ends meet; and then, attend religious events. It’s my strongest belief that it is our responsibility (each of us) to build God’s world. Since the 7th day, He “rested”, and man has been doing the building ever since.
Tony must be a pastor. Lol
[…] you read my article, please read the latest article written by the publisher of Black Men In America.com. The article is “How Do Black People Spend Their Money?” This article is scary and will […]
Thank you for that information! I humbly accept these findings as some lay particular in my household. We as a community need to recognize and take responsibility for our own actions and make better decisions for our households. We’ve lost two generations of fathers and grandfathers to prison, drugs or death. We have to make a come back and remove this “status quo” or stereotypical: Jordans wearing, McDonalds eating, Flat-screen TV buying, Tax refund spending, beauty product buying, human-hair weaving/fixing, Premium package cable looking, dollar store snooping, malt liqour drinking, no job having, apartment renting, EBT name brand spending, Mentality. I’ll take my cut of the $1.1 trillion buying power and now spend it elsewhere in our community and put more in my retirement. Regards
[…] black Americans having an estimated $1.3 trillion in buying power, a single dollar stays in the black community for only six hours compared to 17 days in the white community and 30 days in the Asian […]