PHILADELPHIA — Knowledge is power, and knowledge about money can lead to wealth. But there's a disconnect between who gets that knowledge and who is able to save — especially since the start of the pandemic.
The average white family has a net worth of slightly less than $200,000. The average Black family has a net worth of less than $20,000.
It's called the wealth gap, and it affects everything from education to health care.
Many have been saving more since the start of the COVID-19 pandemic. For others, it's only gotten tougher.
"I can truly say I never understood anything about financial literacy," Veronica Ahiagbe said.
And now?
"I would say I'm on the road to trying to become financially secure and that is by consistently saving," Ahiagbe said.
Ahiagbe started on that road when she learned about Bridges to Wealth, a program based at the University of Pennsylvania. It provides financial literacy training for high schoolers in the city's lowest-income neighborhoods. It also offers sessions for parents and, in Ahiagbe's case, grandparents.
Dr. Keith Weigelt and Dr. Jill Bazelon co-founded the program. Among adult participants, 95% are minorities, 70% are women who are heads of the household and 96% who start the program stay with it.
That's critical because, in the U.S., white families average ten times the net worth of Black families.
"They're not invested in the stock market simply because of education and opportunity," Weigelt said. "And all we're doing is offering education and opportunity."
What does it say that there's such a large wealth gap?
"It says that there is lots of discrimination," Weigelt said.
The wealth gap was wide enough before the COVID-19 pandemic. The last two years have stretched it even wider.
The U.S. saving rate hit record highs in April, but most came from high-income homes. Meanwhile, 31% of Black Americans reported losing all of their savings during the COVID-19 outbreak. More than half reported serious financial problems in the past few months, versus less than a third of white Americans.
Through Bridges to Wealth, adults like Ahiagbe are in investing groups. She has put her pension into mutual funds and built it up by 20%.
"Knowledge is the key," she said. "I'm not upset. I just want to have access to the same knowledge. For me, being comfortable and able to pay my bills, and being able to pass something to generations to come, that would be my gift to them."
