The importance of financial literacy within the Black community
by Tiffany Callender
Monday 20 November 2023
The Black community has historically encountered systemic barriers that have hindered economic progress. These obstacles have perpetuated cycles of financial disadvantage, from limited access to quality education and employment opportunities to disparities in wealth accumulation and financial resources. At the core of addressing these challenges lies the critical importance of financial literacy. It is not merely about understanding budgets or managing money; it is a transformative tool that equips individuals with the knowledge and skills to make informed financial decisions, build wealth, and break free from cycles of poverty.
According to a 2019 report conducted by the Canadian Center for Policy Alternatives, 60 percent of Black Canadians fell into the bottom half of the national distribution of economic family incomes, compared to 47 percent of non-racialized Canadians (Canada’s Colour Coded Income Inequality | Canadian Centre for Policy Alternatives).
Financial literacy remains crucial within the Black community. It serves as a beacon of empowerment and provides the tools to navigate complex financial systems, understand investment opportunities, and cultivate a mindset of economic self-reliance. The crucial need for financial literacy within the Black community underscores the critical role of organizations like the Federation of African Canadian Economics (FACE). One of the primary objectives of FACE is to spearhead initiatives that promote financial literacy among African Canadians. We recognize that education is the cornerstone of empowerment, and our programs aim to bridge the knowledge gap by providing accessible and culturally relevant resources.
Closing the Racial Wealth Gap
Closing the racial wealth gap is pivotal for fostering financial security and choice among
marginalized communities. Despite limited data on net wealth for racialized groups in Canada,
trends from the United States underscore stark disparities. This gap mirrors systemic barriers that impede economic opportunities for Black communities, hindering financial freedom.
Wealth accumulation isn’t solely about monetary assets; it’s about unlocking opportunities, securing independence, and empowering individuals to make life-altering decisions, such as pursuing education or changing careers. However, these opportunities are often out of reach for many racialized individuals due to unequal wealth distribution.
At FACE, we recognize the critical role of financial literacy in dismantling these barriers. By equipping Black communities with the knowledge and tools to navigate financial systems, make informed choices, and build wealth, we empower individuals to break free from economic constraints. Our efforts at FACE are tangible. With the disbursement of $25.4M in loans to black businesses in Canada as of March 31, 2023, we are actively contributing to narrowing the wealth gap.
Overcoming Financial Challenges and Achieving Stability
One indispensable tool stands out in the journey toward overcoming financial challenges and
achieving stability: financial literacy. For the Black community, this proficiency illuminates the path to economic empowerment. Too often, Black entrepreneurs encounter formidable hurdles in accessing vital financial services, be it navigating loans or other funding sources, managing taxes, or securing adequate insurance for their businesses to thrive. The dire need for comprehensive knowledge in these areas is undeniable. It’s more than a matter of prudence; it’s about safeguarding economic well-being. Empowered with financial acumen, individuals gain the confidence to steer their economic destinies and catalyze positive change within their communities. This call for financial literacy initiatives within the Black community isn’t just a plea; it’s a crucial step toward dismantling barriers and fostering a future where economic stability and success are within reach for all.
Tiffany Callender is a co-founder of the Federation of African Canadian Economics (FACE) in 2021, a non-profit organization primarily focused on accelerating the creation of generational wealth for individuals of African descent in Canada. She co-developed the Black Entrepreneurship Loan Fund, a collaboration with the government of Canada. This fund provides financial support and resources to Black entrepreneurs, fostering economic growth and empowerment within the community. Tiffany’s work exemplifies her passion for contributing to the prosperity of the Black community in Canada through initiatives that promote economic growth and empowerment.