The assumption that Black people aren’t competent enough to manage their money has clouded discussions about closing the racial wealth gap.Rather than addressing the root causes of widespread poverty within the black community- the nation’s legacy of racial segregation and discrimination- many offer financial literacy classes, a surface-level solution that fails to account for factors out of their control.We shouldn’t miss the irony that “Black households tend to have lower levels of total spending than their white counterparts, and that these disparities tend to persist across income levels.”

Financial literacy classes teach individuals how to manage their money, with an emphasis on responsible spending and saving. But this strategy overlooks the fact that White families have a much higher estimated median net worth of $384,310, which overshadows the estimated median net worth for Black households, $44,100. Put another way, this means that for every dollar the average White household has to spend, a Black household has “roughly 15 cents,” a gap that has remained fairly consistent over time.Black poverty in America isn’t a skills issue; it’s the side effect of centuries of racist laws, policies, and practices.

On the surface, financial literacy classes seem like an appropriate way to help people make the most of the money they’ve earned.It’s presumably why figures like Jay Z, a Black businessman, partnered with Jack Dorsey, CEO of Square, a credit card processing company that sells point-of-sale hardware, to offer a free Bitcoin education program for residents of Marcy Houses, the Brooklyn public housing complex where he once lived. In another instance, Black actress Tiffany Haddish, who struggled in poverty for much of her life, has advocated for financial education through the She Ready Foundation. “For a long time, I think I was financially illiterate… I was doing what was around me,” she shared.

But when we take a closer look, we can see that promoting financial literacy classes feeds into the myth that we can close the racial wealth gap through skill acquisition. Jay-Z didn’t become wealthy solely through the sweat of his own brow. It’s well known that during the 1980s, he sold crack cocaine in New York, later expanding operations to New Jersey and Maryland. Using this street cred, he became a successful rapper who partnered with Damon Dash and Kareem Burke to co-found Roc-A-Fella Records. Jay-Z would later negotiate deals with luxury brands such as Barneys New York, Balenciaga, and Balmain, as well as liquor distributors like Bacardi and Moët Hennessy.

In another example, Tiffany Haddish grew up in the foster care system and, as a result of this shaky foundation and the lack of strong familial support, struggled with homelessness as an adult. Her life changed because of a key connection she made while performing at the Laugh Factory, a Los Angeles comedy club. Kevin Hart, a successful comedian, gave her $300 to pay for a weekly motel. In addition to this short-term financial boost, he offered to mentor her, an invaluable opportunity in an industry where personal connections can open doors that would otherwise remain under lock and key. Despite her work in Hollywood, Tiffany continued to live frugally for years, renting an apartment for $500 a month. It wasn’t until her breakout role in Girls Trip (2017), a movie in which she co-starred with Regina Hall, Queen Latifah, and Jada Pinkett, that she broke the cycle of poverty. Because of her past struggles, Tiffany spent her entire paycheck, $80,000, to pay off the mortgage for a home rather than spending it on jewelry and clothes that depreciate in value.

While rags-to-riches stories, particularly within the black community, are inspiring because they give working-class people hope that their efforts can pay off, it’s misleading to suggest most wealthy people in this country are self-made. Where would Jay Z be today if he hadn’t partnered with other Black men in the music industry or White men in the liquor industry, and where would Tiffany Haddish be if not for the life raft extended to her during her time of need, the $300 from Kevin Hart and his offer for mentorship? It’s unlikely either would have reached the same level of success without collaborating with other, more established individuals. But their emphasis on financial literacy classes as a solution to Black poverty falsely frames wealth acquisition as solely the result of individual effort.

In another example, consider that Bill Cosby, a popular comedian and actor prior to the scandals surrounding sexual assault allegations, was known for his Pound Cake speeches, where he suggested Black Americans were to blame for their social and economic conditions. While he positioned traditional family values and a strong work ethic as the only ingredients needed to uplift the Black community, his success came from connections with others. Prominent figures in the entertainment industry, such as Carl Reiner, an actor and writer best known for producing The Dick Van Dyke Show, and Johnny Carson of The Tonight Show. Sheldon Leonard advocated for him to co-star in the series I Spy, where he landed his first Emmy. We wouldn’t have Fat Albert and later The Cosby Show without this initial support.

Behind every wealthy Black person is a group of people who supported them. Family and friends offered a compassionate ear and sound advice, and programs designed to provide aid, such as the one that benefited Supreme Court Justice Clarence Thomas, a conservative who benefited from a race-based affirmative action policy when applying to Yale Law School, but later voted to ban this program. His actions demonstrate that while some wealthy and conservative-leaning Black people try to convince othersthat they are self-made, only those who know nothing about their path to success would believe such mythos.

Telling Black poor people, who’ve endured the multigenerational effects of systemic racism, to work harder, be frugal, and save more as if these were the solution to racial inequality is cruel. According to researchers Addo, Darity, and Meyers (2024), “contemporary racial wealth differences reflect historical racial differences in wealth.” They argued that “the primary cause of the Black-White wealth gap is the gap in the capacity of Black and White households to transmit resources across generations.” In other words, poverty is pervasive within the black community today because of the racial injustices from the past. Those peddling financial literacy classes to poor Black people in America might as well be selling snake oil, because the results are not going to alleviate the suffering of those in need.

While it may feel empowering to suggest that Black people can easily solve the problem of racialized poverty by taking financial literacy classes, it’s misleading. As long as many Americans buy into the notion that society is mostly fair, and that poverty in Black and otherwise marginalized communities is the result of laziness and ignorance rather than systemic racism, they will advocate for financial literacy classes to be more widely available, while leaving the system that perpetuates racial economic inequality intact. Rather than supporting restorative justice, which could address the multigenerational effects of slavery, segregation, and discrimination, their strategy places all responsibility, and thus all blame, on those enduring poverty.

Telling someone they have all the tools they need to fix a problem when they’re literally deprived of equal access to resources and opportunities is cruelty dressed in a cloak of kindness and compassion. Financial literacy classes may sound helpful, but in reality, they will never close the racial wealth gap or break the cycle of poverty so many Black Americans find themselves in. Black people are not any more likely to be frivolous spenders. But those who see poverty as a self-inflicted wound assume that if they simply attended these classes and learned how to make more savvy financial decisions, all of the problems associated with the Black race would fade away.Advising people to “save money” and warning them against “taking out loans with high interest rates” overlooks racial inequalities baked into the system, factors out of their control.