For African-Americans, paying down debt is the top financial priority, according to the biennial survey of African-Americans commissioned by Prudential Financial.
The African-American Financial Experience survey, which was conducted by Gfk Public Affairs and Communications, also found that half of African-Americans say their financial situations have improved from a year ago, compared to 33 percent of the general population.
It is student loan debt that is of particular concern to African-Americans, particularly since college-educated African Americans are twice as likely to have student loan debt compared with all college-educated Americans, the survey found. This debt hampers the ability to invest or save for retirement.
African-Americans are significantly more likely to have some type of debt (94 percent) compared to the general population (82 percent) — credit card debt, student loan debt, and personal debt are all significantly higher in the African-American community, even for more affluent African-Americans, according to the survey.
Not including home mortgages, African-Americans have a median household debt of $18,000, which is about 50 percent higher than the household debt for the general population. In addition, one in four African-Americans has felt anxiety or depression as a result of debt.
Asked how they would use an extra 10 percent of income, almost half (48 percent) of African-Americans indicated their top priority would be paying down debt, which was a higher percentage than the general population.
For African-American households, the median household savings was only $40,000, compared to $97,000 nationally. Add a college education to the equation and household savings rises to $66,000 for African-American households—but jumps to $207,000 for the average American household.
African-American respondents were half as likely as the general population to have long-term investments like stocks, bonds and mutual funds. However, they were significantly more likely to be financially supporting someone who is unemployed, as well as grandparents, parents, children and grandchildren.
The survey was conducted March 7 to 19, using a probability-based Internet panel, polling 1,153 African-Americans 25 to 70 years old, with household income of at least $25,000, who have primary or shared responsibility for household financial decisions. The margin of sampling error for African-Americans was plus or minus 5 percent.