A child can inherit a family’s financial history long before they ever receive any money. It might show up in the house a grandmother bought at 30 and still owns at 75, in college tuition paid without loans, in stocks bought for a teenager to grow over time, or in parents who can help their child buy a first home.
Another child might inherit a different story: no property, no investments, no college fund, and no savings to keep an emergency from becoming more debt.
The gap between these two starting points remains substantial for Black Americans, including families in Washington, D.C., and surrounding areas.
“Data shows that only 1 of 20 students entering historically Black colleges and universities (HBCUs) has had a personal finance course,” Theodore R. Daniels, founder and president of the Society for Financial Education and Professional Development (SFEPD), a Washington-area nonprofit, said earlier this year. “In the long term, increasing financial literacy in young adults can equip them to make positive financial decisions for themselves and their families, strengthen the economy overall and close a widening wealth gap.”
Among households that received an inheritance, Black homeowners had a median inheritance of $20,483 in 2022, according to a March Urban Institute report. White homeowners who received an inheritance had a median of $54,645. Among renters, Black households that received an inheritance had a median of $1,754. The median for white renters receiving an inheritance was $24,554.
Black families were also less likely to receive an inheritance. About 12.6% of Black homeowners reported receiving one, compared with 32.4% of white homeowners. Among renters, the shares were 4.2% for Black households and 17.4% for White households.
An inheritance of $20,000 from a parent or grandparent could help cover a down payment, reduce college debt, fund a business, or be invested for the future. Someone who receives nothing has to build savings by working, borrowing, or both.
“The effects of inheritances for the sizable minority below the top that receive one are likely a significant source of economic opportunity,” Janet Yellen, former chair of the Federal Reserve Board, said in an earlier interview.
Financial Literacy to Combat Disparities
A May Urban Institute analysis revealed median Black household income in the District was $60,591 in 2024, compared with $168,800 for White non-Hispanic households.
For families already struggling to cover rent, food, utilities, transportation, and child care, advice to save more can feel out of touch. Learning about finances does not raise a worker’s pay or make rent disappear. And a budgeting class cannot undo decades of discrimination in housing, lending, and employment that Black Americans have faced.
But it can help someone spot a predatory loan, understand the cost of a 25% credit card interest rate, take advantage of an employer’s retirement match, understand the difference between saving and investing, protect their credit score, or see why having a will matters before a family faces loss.
”Black people cannot close the racial wealth gap by changing their individual behavior — i.e. by assuming more ‘personal responsibility’ or acquiring the portfolio management insights associated with ‘[financial] literacy,” declared William Darry Jr., the Samuel DuBois Cook Professor of Public Policy, African and African American Studies and Economics at Duke University, and Darrick Hamilton, economist and founding director of the Institute on Race, Power and Political Economy at The New School.
The Society for Financial Education and Professional Development says it has provided financial education to more than 500,000 people since 2001, including hundreds of thousands of college students, primarily at HBCUs.
In 2024, the organization hired the independent research firm ICF to evaluate its financial education programs. SFEPD Student Ambassadors scored 132% higher than their peers on an objective financial knowledge assessment. They were five times more likely to maintain an emergency fund, seven times more likely to make student loan payments on time, and 2.5 times more likely to have a retirement plan.
“These findings lend evidence to the growing body of research proving tailored financial education makes a tangible difference in people’s lives,” Daniels said.
What a House Can Leave Behind
For many American families, the home is their most valuable asset. Mortgage payments build equity, and rising property values can increase it. A house bought years ago can later be sold to fund retirement or be passed down to children.
In Prince George’s County, officials moved in 2023 to prohibit real estate appraisal discrimination after documented concerns that racial bias could depress property values.
“Appraisal bias costs working families millions each year in equity and generational wealth in the value of their homes, the largest asset for most families,” then-Council member Mel Franklin said. “When someone’s home is devalued just because of the color of their skin, it is a violation of their civil rights and basic humanity.”
Across the country, Urban Institute researchers reported this summer that renters had a median net worth of $10,400, compared with $400,000 for homeowners. First-time buyers accounted for a record-low 21% of buyers in 2025, and the typical first-time buyer was more than a decade older than the typical first-time buyer in 1987.
“Owning a home is a keystone of wealth—both financial affluence and emotional security,” said financial advisor Suze Orman.
The Importance of Estate Planning
A homeowner might spend decades paying off a mortgage, then pass away without a will or estate plan. Their children could be left to sort out ownership, navigate probate, and deal with legal costs and competing claims.
A long-time D.C. or Prince George’s County homeowner may live on a modest retirement income while owning property worth hundreds of thousands of dollars. Savings, retirement accounts, businesses, land, and life insurance can add to what survives the owner.
Research from the Urban Institute, released earlier this year, found that senior Black families were more likely than their white counterparts to own life insurance. When life insurance coverage was included in senior Black families’ assets, it accounted for 16% of their total asset value, second only to their homes.
Without up-to-date beneficiary information and basic planning, even assets saved for children can be difficult to pass on as intended.
Constance Carter, founder of California’s largest independent Black-owned real estate firm, addressed the issue during an appearance on “Let It Be Known.”
“Estate planning isn’t just paperwork. It’s survival. It’s power,” Carter said. “And it’s how we make sure that our children inherit more than just debt.”
Before the First Credit Card Arrives
A teenager can finish high school and, within a few years, take out student loans, open credit cards, finance a car, rent an apartment, and start a job that includes health insurance and a retirement plan.
Parents don’t have to wait for college classes to teach these lessons. An allowance can teach kids about saving. The first paycheck can show them taxes and direct deposit. Teens can learn what happens if they don’t pay off a credit card. Parents can show their child a retirement statement and explain why money is deducted from each paycheck for the future.
Sabrina Lamb, author of “Do I Look Like an ATM? Parents’ Guide to Raising Responsible African American Children,” has argued that parents should teach those lessons at home.
“Empowering our children through financial education begins at home with parents because beliefs about money are formed in the home,” Lamb said. “As generational wealth slips through our fingers, it is no longer advisable for either parents or children to remain ignorant of these issues, particularly when a parent is confronted with them daily.”
Daniels wants to teach those lessons before young people make their most expensive mistakes.
“[The SFEPD] course is designed to address the financial challenges and needs of the Black community,” he said.
