Black women, still spending

Where Do Most Black Women Spend Their Money?

By Daryl C. Hannah

http://www.diversityinc.com/public/4411.cfm

Mounting pressure from a tight economy has most Americans changing their spending habits on everything from education to healthcare needs. But there is one group that remains steadfast in its spending habits despite the crumbling economy: Black women.

According to a new study by ING, as much as 68 percent of Black women say they buy what they want in a good or bad economy.. A staggering 41 percent say they feel guilty about how much they spend on expensive brands.

"What we have here is a financial perfect storm," says Rhonda Mims, president of the ING Foundation and senior vice president of ING's Office of Corporate Citizenship & Responsibility. "An inclination to spend combined with an extraordinary desire to help others financially has left many Black women behind the curve in terms of savings."

The study, which asked 1,000 professional Black women and 454 non-Black professional women about their spending habits, found that 40 percent of Black women shop to cheer themselves up. Black women are also more likely to shop impulsively.

"For some Black women, excessive spending makes the road to long-term financial security even longer," Mims says. "To an extraordinary degree, Black women consider themselves trendsetters and centers of influence. Opinion-leading has its price."

Some accounts view the issue slightly differently. "A lot of these purchases are made on credit," says She-Lia Henry, controller for DiversityInc and president of the southern New England Westchester Chapter of National Association of Black Accountants (NABA). "And when things are bought on credit, you don't take the economy into consideration."

Henry hasn't bought anything for herself in more than two months. But her selfless spending is not unusual. Black women are also contributing healthily to their families and religious institutions.

More than half of the Black women surveyed say they've lent $500 or more to friend or to family in the last year; one-third say they've loaned upwards of $1,000.

"Black women's sense of obligation to community and family is both extraordinary and commendable," Mims says. "But when you are pulled in so many directions financially, something or someone has to pay the price. For Black women, it appears their financial well-being suffers."

Unfortunately, that sense of obligation has adversely affected Black women's ability to save.

Among the Black women surveyed, 66 percent say they own a retirement account, compared to 79 percent of all other women; 28 percent say they own individual stocks and bonds, compared with 52 percent of all other women; and 23 percent say they own mutual funds, compared with 39 percent of all other women.

"Many were not taught good financial habits," says Henry. "The African-American community spends more than any other ethnic group." For many Blacks, budgeting is either not a high priority or is not done correctly.

Among those surveyed, 72 percent of Black women said they strongly agreed with the statement "I wish I had learned more about money and investing growing up."

It's unclear whether recent Wall Street events will curb spending habits for Black women, especially as some 85,000+ face unemployment. But if there is a change, according to some analysts, it won't be from an expensive brand to a generic brand--it will be from an expensive brand to nothing at all.