By Daniel J. Sessions, CEO of Sessions Lending Group

Financial literacy in the black community is important to me because I believe that knowledge is power and that we need to empower ourselves financially to achieve true freedom.

First off, let’s talk about the basics. Did you know that 64% of Americans don’t have a budget and 76% are living paycheck to paycheck? That’s according to the National Financial Educators Council. It’s crazy to think that so many people are just winging it when it comes to their finances. We need to start by learning the basics, like budgeting, savings, and debt management.

Another thing that’s important is entrepreneurship. Black entrepreneurs are one of the fastest-growing segments, but they still face a lot of challenges when it comes to accessing capital. According to the Kauffman Foundation, they’re more likely to have difficulty accessing capital and face higher rejection rates when applying for loans. That’s why it’s important to provide education on starting and running a small business, including funding and marketing. We need to promote economic growth and self-sufficiency in our communities.

Credit scores are another crucial part of financial literacy. Did you know that 53% of Black adults have subprime credit scores, compared to 25% of white adults? That’s according to the Federal Reserve. This makes it harder to access credit and can lead to higher interest rates on loans. We need to educate our communities on how credit scores work, how they can be improved, and how to avoid predatory lending practices that often target low-income and minority communities.

Investing is another area where we need to step up our game. According to a study by the Federal Reserve, only 33% of Black households own stocks, compared to 61% of white households. Investing is a powerful tool for long-term wealth creation, but we need to learn how to do it wisely and avoid risky schemes. We need to diversify our investments and minimize risk.

Homeownership is also a key part of financial literacy. It’s one of the best ways to build equity and achieve long-term financial stability. But the Black homeownership rate is currently at 42.1%, compared to a white homeownership rate of 72.2%, according to the Urban Institute. We need to learn how to navigate the housing market, understand mortgages, and avoid discrimination in housing.

Retirement planning is another area where we need to focus. According to the National Institute on Retirement Security, the median retirement account balance for Black households is only $22,000, compared to $140,000 for white households. That’s a huge gap, and it shows that we need to start planning for retirement early and take advantage of tax-advantage retirement accounts. Working with a financial advisor can also be helpful.

We also need to address systemic barriers that affect the Black community’s financial stability. According to the National Fair Housing Alliance, people of color are more likely to be denied mortgage loans, and less likely to be shown properties in predominately white neighborhoods. This kind of discrimination is holding us back, and we need to fight against it.

Finally, we need to be aware of financial scams and fraud. According to the Federal Trade Commission, in 2020, there were over 2.2 million reports of fraud, with a total reported loss of $3.3 billion. These scams often target low-income and minority communities, so we need to be vigilant and educate ourselves on how to avoid them.

In conclusion, financial literacy is essential for economic empowerment in the black community. We need to start by learning the basics, like budgeting and saving, and then move on to more advanced topics like investing and retirement planning. We need to be aware of systemic barriers that affect our financial stability and fight against discrimination in housing and lending. By educating ourselves on financial scams and fraud, we can protect ourselves from being taken advantage of. Financial literacy is a powerful tool for achieving economic freedom, and we all can learn and grow. Let’s empower ourselves and our communities by taking control of our finances and building a better future for ourselves and our families.

This Op-Ed on financial literacy is powered by Elevate Dayton's financial literacy education partnership with Sessions Lending Group & the BDG Network.