Contrary to what many want to believe, the racial wealth gap is currently widening rather than shrinking, most significantly between Black and White populations. One of the greatest obstacles to racial wealth equity is the myth that changes in individual behavior can solve a problem that is systemic in nature. A recent study indicates that over the course of their lifetimes, Black Americans earn $1 million dollars less than their White counterparts. White families also benefit from greater financial literacy and more informed consumer behaviors, while nearly half of Latinx and Black households are unbanked or underbanked. These and other factors contribute heavily to racial wealth disparity.

It’s important that underinvested individuals and communities utilize available financial resources to become more financially empowered, maximize their current wealth, conserve it, and build on it for future generations. Here are some avenues that can help underbanked consumers get started on the path to financial wellness:

• Look for free online educational resources. Adults can find plenty of free online education on personal finance and similar topics. This is an excellent way to get started, since it’s impossible to make sound fiscal decisions without understanding how related systems, policies, and strategies work. Kids can also benefit from learning about personal finance early in life. Many online resources provide age-appropriate lessons and activities that help build financial literacy in children.
• Bank with CDFIs. CDFIs are geared specifically toward helping the low-to moderate-income consumer market. They offer equity-oriented types of accounts as well as financial literacy training, loans, and local investments. Types of CDFIs include banks, loan funds, credit unions, micro-enterprise funds, corporation-based lenders and investors, and venture funds. Educate yourself about these institutions and find out if there’s one near you that can support your journey to well-managed wealth.
• For small business owners: consider a Community Advantage loan. Owning a business is itself a powerful means by which people of color can bridge racial wealth disparities. Obtaining an equity-friendly loan offers additional support to minority business owners. Community Advantage is a loan program with the US Small Business Administration (SBA). The program helps business owners in underinvested communities gain access to a line of credit as well as loan management tools.
• Invest in home ownership. Owning a home is still the first and foremost method of building personal wealth and financial security in the US. Increasing home ownership among people of color can go a long way toward addressing the racial wealth gap. Talk to a financial advisor with your CDFI, small bank, or equity-oriented nonprofit finance organization about how to start your journey toward home ownership. You can find more resources on this here.
• Get an equity-oriented home loan that fits your needs. Don’t become a victim of predatory bank loans, or any loan that doesn’t fit your needs. Find out how to get an affordable, sustainable home loan from an organization that underwrites mortgages for low-income homeowners. One such program is the Community Advantage Program (CAP), which is a community reinvestment initiative made possible by the collaboration of the Center for Community Self-Help, the Ford Foundation, and Fannie Mae.
• Seek out small banks with consumer-oriented products and services. If you can’t find a CDFI credit union or bank near you, consider opening an account with a small local or regional bank. Such banks often offer more consumer-friendly products and services than larger banks, such as checking accounts with no overdraft fees or minimum balances, transactions at surcharge-free ATMs, and other benefits. The right bank card can help significantly to maximize balances and offer consumer protection.
• Invest in your future—literally. Investing is an important means to building wealth for anyone, but especially for individuals and families of color. Don’t be intimidated: investing isn’t just for risk-takers, the wealthy, or people who work on Wall Street. Talk to a trusted, equity-focused financial advisor about how to participate in the US financial market. There’s a variety of ways to do this safely, securely, and with minimal amounts of money or effort. You may want to start with an index fund.
• Take advantage of nonprofit financial partnership programs. Nonprofit personal finance organizations can help underinvested individuals and people of color with financial education, budgeting, saving, investing, paying for college, and managing credit. You can find a list of national organizations here, but it’s a good idea to look for finance nonprofits and similar institutions near you.

Help Bridge the Racial Wealth Gap Now With Foundation 99

Foundation 99 partners with public employers such as school districts, government organizations, and nonprofits to bring financial guidance to employees. Our goal is to help empower communities with access to the financial tools and resources they need to achieve financial wellness. Our Financial Coaches work on creating a long-term plan customized for each individual, and all services are provided at no cost.

Foundation 99 is proud to introduce the F99 Bank Card. It’s part of a high-yield, FDIC-insured checking account that gives users superior investment returns and financial resources. Each checking account comes with an investment account and access to 1:1 financial coaching as well as convenient tools and services. These include direct deposit, a mobile app, and free transactions at over 55,000 ATMs nationwide. The F99 Bank Card helps consumers build wealth and financial literacy—all without a credit check or bank overdraft fees.

Simple, Secure, and Under Your Control. The F99 Bank Card bundles your checking and investing needs, all while helping local communities build generational wealth.

We can achieve financial education for the 99% with your help. Each F99 Bank Card holder directly helps Foundation 99 and our mission to help empower financial freedom for many who struggle financially. Your donations also provide us with more resources to reach out to more employers so they can provide financial education to their employees through our financial wellness tools and coaches. Contact us!