Black American Consumerism is distilled in the 1954 film “The Secret of Selling to the Negro” which provided advertisers with psychological insights into the mind of African Americans for more effective advertising. "Three Negro habits" anyone selling to Black Americans should know: 

1. The Negro buys by Brand and is quick to turn down off-brands.

2. The Negro buys by quality and prestige because when the negro buys, they buy for the admiration and approval of friends and relatives. 

3. The Negro resents any indication that they may not be able to afford quality items, and hence do not offer alternatives at the point of sale. 

The same film went on to say, "According to leading researchers, in proportion to population and income, Negroes buy more quality products than any other comparable United States group."

Many of us, ourselves included, often make purchases that we do not need to impress people we do not like. Growing up, many of our friends and peers owned the latest sneakers, phones, and other expensive consumer goods, yet it was clear that their families struggled financially. For some, these same purchasing patterns persist into adulthood. We challenge you to reflect on your spending habits. How many times in the past have you purchased a non-essential item that costs more than 50% of your net worth? How many times did you immediately spend your allowance or paycheck on another pair of shoes or clothing items? 

We break the bank to make these purchases, and though it provides us with temporary satisfaction and approval, it deprives us of future financial stability. Black people account for 13% of the population, yet our spending growth rate has outpaced that of white Americans who make up 60% of the population. Instead of saving what we earn and looking to multiply it, we often trade it in for potentially meaningless items that quickly lose value. 

Shackled to consumerism

This pattern of behavior has contributed to the stagnant economic progress among black communities. A good majority lack financial reserve or economic might. A consumerism mindset does not allow for long-term thinking.Our desire to always impress our peers by dressing to impress or “not seem cheap” has been our financial shackle. 

"The Secret of Selling to the Negro" was released 70 years ago, and businesses today use the same strategies to earn the black buying power. For 70 years we have maintained the same detrimental habits because our relationship with money has been flawed from the start. There comes a point when we must realize that money is a tool for advancement, understanding the value of money and the benefits of spending it wisely can lead to a wonderful life, a life where you can afford to do the things you want, and not have to sacrifice your standard of living. 

We must get rid of the need-to-impress mentality and understand that $50 sneakers are just as good as the ones that go for $150. The 2010 Honda Odyssey will take you to the same place as the BMW. Money not spent on useless wants can be saved and invested to return more money. True wealth is having assets that bring income without any effort on your part. To gain such assets, we must learn how to strategically spend our financial resources, and until we do so we are condemning our future selves to a life of economic uncertainty. 

Psychology towards money

Our goal is to expose how our spending habits inevitably lead to a difficult life and realize that there needs to be a cultural shift in our psychology towards money.  Here are 3 thoughts we want to leave you with. 

1. Money is a limited resource and should be spent wisely. 

2. Address the need to purchase items to gain the approval/admiration from your community. 

3. Reflect on your goals for the future and apply long-term strategic thinking to your money habits.

Look forward to our next finance post where we will share a framework of thinking we all should apply before spending our financial resources.

“Doing well with money has little to do with how smart you are and a lot to do with how you behave” - Morgan Housel, author of The Psychology of Money 

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References

The Most Powerful Way to Think About Money by Paula Rant: https://www.youtube.com/watch?v=ugIuHWc6Nuc

THE SECRET OF SELLING THE NEGRO (1954):
https://www.youtube.com/watch?v=E8PBrhFN35c

The Psychology of Money by Morgan Housel
https://static.booktopia.com.au/pdf/9780857197689-1.pdf

A $300 billion opportunity: Serving the emerging Black American consumer
https://www.mckinsey.com/featured-insights/diversity-and-inclusion/a-300-billion-dollar-opportunity-serving-the-emerging-black-american-consumer

About YBPNN
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