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Black Consumers and Money Management - US - May 2016

"Black consumers are eager for help and in need of money management services. Black consumers’ household structures, dynamics, and incomes differ from the total population, presenting them with specific challenges in managing their money."

- Tonya Roberts, Multicultural Analyst

This report looks at the following areas:

  • Blacks need help managing their money
  • Many forced to make cuts to meet expenses
  • Significant issue of trust and fairness needs to be addressed

Many Blacks may not know where to go to begin an effective money management regimen, but they are seeking answers. There is a great opportunity for brands to build long-term relationships with optimistic Black consumers who can be cultivated to become a new segment of growing affluence.

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Blacks need help managing their money
            • Figure 1: Attitudes about saving/managing money and financial security, Blacks versus all, July 2014 -September 2015
          • Many forced to make cuts to meet expenses
            • Figure 2: Top ways Black manage unexpected expenses – Nets, December 2015
          • Significant issue of trust and fairness needs to be addressed
            • Figure 3: Attitudes around Black/African American treatment related to loans, December 2016
          • The opportunities
            • Better money management can help Blacks afford their desires
              • Figure 4: Financial trade-offs – First to be cut, December 2015
            • Credit card consolidation could provide easy first step
              • Figure 5: Attitudes toward credit and loans, December 2015
            • Smartphone apps and online tools can help younger Blacks engage
              • Figure 6: Smartphone app resources interested in using, by age, December 2015
            • Trust building starts by understanding Black consumers’ concerns
              • Figure 7: Attitudes toward retirement, December 2015
            • Young, upwardly mobile Blacks present opportunity as they move into peak-earning years
              • Figure 8: Managing unexpected expenses – Saving, by age. December 2015
            • What it means
            • The Market – What You Need to Know

              • Blacks need help managing their money
                • Blacks find interest in financial ads
                  • Blacks’ median household income lags
                    • Black households far more likely than Whites to be headed by women
                      • Growth projected for 25-44-year-old Black population
                      • Market Perspectives

                        • Help wanted? Less than half are “very good” at managing money
                          • Figure 9: Attitudes about saving/managing money and financial security, Blacks versus all, July 2014-September 2015
                        • Blacks more interested in financial services ads, paying for services
                          • Figure 10: Attitudes toward financial services ads and financial advice, Blacks versus all, July 2014 -September 2015
                      • Market Factors

                        • Mean income for Blacks lags behind Whites
                          • Figure 11: Mean income before taxes, White and Black, 2009-2014
                        • Black households far more likely than Whites to be headed by women
                          • Figure 12: Family households with own children, by race and Hispanic origin of householder, by type, 2014
                          • Figure 13: Attitudes toward money management, Black moms versus all, July 2014-September 2015
                        • Growth projected for 25-44-year-old Black consumers
                          • Figure 14: Black population, by age, 2011-21
                      • Key Players – What You Need to Know

                        • Black churches take on role of money management educator
                          • Mobile banking sees slower adoption Black consumers
                            • FSIs struggling to gain Black consumers’ trust
                              • Cash becoming less essential form of payment
                              • What’s Working?

                                • Black churches take on role of money management educator
                                  • Financial industry begins to diversify advisor ranks
                                  • What’s Struggling?

                                    • Slow adoption rate of mobile banking among Black consumers
                                      • Figure 15: Mobile banking usage, by race/Hispanic origin, August 2015
                                      • Figure 16: Chase digital ad, 2015
                                    • Payday loans unpopular, providing discomfort
                                      • Figure 17: Attitudes toward payday loans, December 2016, April 2015
                                    • FSIs struggling to gain Black consumers’ trust
                                      • Figure 18: Banking and investment products currently owned, Black consumers indexed to all, October 2014-December 2015
                                  • What’s Next?

                                    • Cash becoming less essential form of payment
                                      • Figure 19: Attitudes toward paying in cash, July 2009-September 2015
                                      • Figure 20: ApplePay digital ad, 2015
                                  • The Consumer – What You Need to Know

                                    • Many Blacks forced to make cuts to meet expenses
                                      • Better money management can help Blacks afford their desires
                                        • Credit card consolidation could provide easy first step
                                          • Debt making many Black consumers uncomfortable
                                            • Trust in financial service providers is lacking
                                              • Smartphone apps and online tools can help younger Blacks engage
                                                • Opportunity for financial advisors to offer planning services
                                                  • Lack of trust among Blacks needs to be addressed
                                                  • Money Management Techniques

                                                    • More effort spent shopping around than setting budgets
                                                      • Figure 21: Money management techniques, December 2015
                                                    • Black women shopping for best prices
                                                      • Figure 22: Money management techniques – Related to shopping around and advisor use, by gender and age, December 2015
                                                    • Older Black consumers, particularly women, cutting back
                                                      • Figure 23: Money management techniques – Related to budgeting, by gender and age, December 2015
                                                    • Younger Blacks trying to boost income and using public transportation
                                                      • Figure 24: Money management techniques – Related to boosting income, by gender and age, December 2015
                                                  • Managing Unexpected Expenses

                                                    • Three quarters manage unexpected expenses by economizing
                                                      • Figure 25: Managing unexpected expenses, December 2015
                                                    • Older Black consumers more likely to economize
                                                      • Figure 26: Managing unexpected expenses – Economizing, by age. December 2015
                                                    • Younger Blacks present opportunity for savings accounts
                                                      • Figure 27: Managing unexpected expenses – Saving, by age. December 2015
                                                    • More affluent Blacks can improve money management techniques
                                                      • Figure 28: Managing unexpected expenses – Economizing and paying late, by household income, December 2015
                                                  • Financial Trade-offs

                                                    • Leisure and entertainment first expenses trimmed
                                                      • Figure 29: Financial trade-offs – First to be cut, December 2015
                                                      • Figure 30: Financial trade-offs – Any rank, December 2015
                                                    • 25-34-year-olds engaging in dangerous credit card practices
                                                      • Figure 31: Financial trade-offs – Leisure versus paying less on money owed, by age, December 2015
                                                    • Black mothers sacrifice to put children first
                                                      • Figure 32: Financial trade-offs, by gender and parent status, December 2015
                                                      • Figure 33: Aggieland Credit Union, digital ad, 2016
                                                  • Attitudes toward Debt and Credit Cards

                                                    • Debt making many Black consumers uncomfortable
                                                      • Figure 34: Attitudes toward debt, Black consumers indexed to all, December 2015, April 2015
                                                      • Figure 35: Visa mobile ad, 2015
                                                    • Young consumers present opportunity for “good debt”
                                                      • Figure 36: Attitudes toward debt, by age, December 2015, April 2015
                                                      • Figure 37: HomeTrust Bank mobile ad, 2016
                                                    • Blacks less likely than all to pay with cash
                                                      • Figure 38: Attitudes toward credit cards, Black consumers versus all, December 2015
                                                    • More affluent Blacks understand rewards, but room for education
                                                      • Figure 39: Attitudes toward credit cards, by household income, December 2015
                                                      • Figure 40: BBVA Compass mobile ad, 2015
                                                    • Opportunity to consolidate credit card balances
                                                      • Figure 41: Attitudes toward credit and loans, December 2015
                                                    • Younger Blacks willing to take on debt for better life and instant gratification
                                                      • Figure 42: Attitudes toward credit and loans – Any agree, by age, December 2015
                                                    • Debit cards to stay debt-free appealing to Black consumers
                                                      • Figure 43: Debit card features using/interested in using, Black consumers indexed to all, December 2015, April 2015
                                                  • Attitudes toward Loans

                                                    • Trust and comfort issue for Black consumers considering loans from bank
                                                        • Figure 44: Attitudes toward loans, Black consumers indexed to all, December 2015
                                                      • Young Black men more comfortable borrowing money
                                                        • Figure 45: Attitudes toward loans, by gender and age, December 2015
                                                      • Most not comfortable with payday loans
                                                        • Figure 46: Attitudes toward payday loans, December 2016, April 2015
                                                      • Young Blacks far more likely to seek payday loan
                                                        • Figure 47: Attitudes toward payday loans, by age, December 2016, April 2015
                                                    • Interest in Online Resources, Smartphone Apps

                                                      • Opportunity to draw in Black consumers with online tools
                                                        • Figure 48: Online resources using/interested in using, Black consumers indexed to all, December 2015, April 2015
                                                      • Online resources most attractive to young Blacks
                                                        • Figure 49: Online resources interested in using, by age, December 2015
                                                      • Smartphone apps also of interest
                                                        • Figure 50: Smartphone app resources using/interested in using, Black consumers indexed to all, December 2015, April 2015
                                                      • Smartphone apps can attract younger and middle-aged Blacks
                                                        • Figure 51: Smartphone app resources interested in using, by age, December 2015
                                                    • Attitudes toward Retirement

                                                      • Half of Black consumers worried about retirement
                                                        • Figure 52: Attitudes toward retirement, December 2015
                                                      • Some anxiety increases as retirement nears
                                                        • Figure 53: Attitudes toward retirement, by gender and by age, December 2015
                                                      • Opportunity for financial advisors to offer planning services
                                                        • Figure 54: Financial advisor using/interested in using, December 2015
                                                      • Young Blacks best opportunity for financial advisors
                                                        • Figure 55: Financial advisor interested in using, by age, December 2015
                                                    • Trust and Confidence in Financial Services

                                                      • Blacks optimistic, but financial providers need to develop trust
                                                        • Figure 56: Trusts and confidence in finances and financial services, December 2015
                                                      • Black men making financial improvements
                                                        • Figure 57: Trusts and confidence in finances and financial services, by gender and age, December 2015
                                                      • Issue of trust and fairness needs to be addressed
                                                        • Figure 58: Attitudes around Black/African American treatment related to loans, December 2016
                                                      • Signs improving for younger audience, yet work needs to be done
                                                        • Figure 59: Attitudes around Black/African American treatment related to loans, December 2016
                                                    • Appendix – Data Sources and Abbreviations

                                                      • Data sources
                                                        • Consumer survey data
                                                          • Direct marketing creative
                                                            • Abbreviations and terms
                                                              • Abbreviations

                                                              Companies Covered

                                                              To learn more about the companies covered in this report please contact us.

                                                              Black Consumers and Money Management - US - May 2016

                                                              £3,199.84 (Excl.Tax)