Many people face challenges when it comes to money, but for African Americans and other people of color, these challenges can be even more significant. This is because there is a huge amount of structural inequality baked into every system within America – including business, educational, government, legal, and health care systems.

Within these systems, the rules of our society often make it harder for certain groups to succeed. But that doesn’t mean we shouldn’t try – on an individual and systemic level – to promote change.

Here are six ways that structural inequality affects Black people’s finances, along with practical steps and advocacy tips to help overcome these obstacles.

Unequal Access to Education

In many cases, schools in neighborhoods with more people of color have fewer resources, which can make it harder for students to get a good education. For example, a report from the National Center for Education Statistics shows that schools with a high percentage of students of color receive about $1,800 less per student than schools with fewer students of color.

What to do about it:

• Look for local organizations that offer tutoring or after-school programs to help students succeed.
• Encourage your friends and family to vote for policies that support equal funding for all schools.

Advocacy tip:

• Contact your local school board and elected officials to demand equitable distribution of resources and funding for all schools in your community.
• Limited Job Opportunities

Many people of color face discrimination when looking for work, which can make it harder to find a good job with a decent salary. According to the Economic Policy Institute, the unemployment rate for Black workers is consistently about twice as high as the rate for white workers.

What to do about it:

• Reach out to local job centers, community organizations, or nonprofits that help people of color find work.
• Network with people in your community who can help you find job opportunities.

Advocacy tip:

• Support and promote local businesses owned by people of color and encourage others to do the same. Buying black and supporting African American entrepreneurs helps create more job opportunities within underserved communities.

Wage Gap

Even when people of color do find work, they often face a wage gap. According to the U.S. Bureau of Labor Statistics, Black workers earn only 75% of what white workers earn, while Hispanic workers earn only 74% of what white workers earn.

What to do about it:

• Know your worth and research the average salary for your job title and experience.
• Practice negotiation skills to advocate for fair pay in job interviews and performance reviews.

Advocacy tip:

• Speak out against pay disparities in your workplace and encourage your employer to conduct a pay equity audit to identify and address wage gaps.

Lack of Access to Affordable Housing

Housing is a major expense for most people, and for people of color, finding affordable housing can be especially difficult. A report from the National Low Income Housing Coalition found that people of color are more likely to experience housing cost burden, which means spending more than 30% of their income on housing.

What to do about it:

• Research housing assistance programs in your area that can help you find affordable options.
• Learn about your rights as a tenant to ensure you are not being unfairly treated by landlords.

Advocacy tip:

• Get involved with local organizations that fight for affordable housing and support policies that promote fair housing practices, like inclusionary zoning and rent control measures.

Predatory Lending Practices

Some financial institutions take advantage of people of color by offering loans with high interest rates or hidden fees. According to the Center for Responsible Lending, African American and Latino borrowers are more likely to receive high-cost, risky mortgages than white borrowers.

What to do about it:

• Be cautious of loans that seem too good to be true or have unusually high interest rates.
• Research and compare different loan options before signing any agreements.

Advocacy tip:

• Advocate for stronger consumer protection laws and regulations that prevent predatory lending practices. Contact your elected officials and urge them to support policies that protect borrowers from financial exploitation.

Racial Wealth Gap

Lastly, the racial wealth gap is a result of many of the factors mentioned above. According to the latest data from the Federal Reserve, the median wealth of white families is roughly eight times greater than that of Black families and four times greater than that of Hispanic families.

What to do about it:

• Start saving as early as possible, even if it’s just a small amount each month.

• Learn about investing and work towards building a diverse portfolio.

Advocacy tip:

• Support policies that address the root causes of the racial wealth gap, like improving access to quality education, affordable housing, and fair employment opportunities. Join local advocacy groups and engage with community leaders to push for systemic changes that will promote greater financial equity for all.

Take Personal Action While Demanding Structural Change

While structural inequity can make it more challenging for African Americans and other people of color to achieve financial stability, there are steps you can take to overcome these obstacles. 

By becoming informed about the issues, taking practical steps to improve your financial situation, and advocating for systemic changes, you can work towards a more equitable and financially secure future for yourself and your community.