Context

Previous research indicates that being from a Black and low-income or other disadvantaged family background is adversely related to financial capability.

While financial education in schools has been linked to improved financial capability, it does not close the gap between children with vulnerabilities and those without, and might even widen it. Why this is the case is, to date, unclear. One possibility is that people from Black and disadvantaged backgrounds have distinctly different lived experiences which lead to different financial capabilities, and that financial education as currently designed is not very relevant to them.

Therefore, this study set out to understand the financial capability of Black teenagers at a key stage of their lives, as they were approaching their transition to independent living.

The study

The study aimed to understand the needs and lived experiences of money and finance before they transitioned from school and living with family to potentially living independently.

This research involved 30-minute semi-structured interviews with 25 Black teenagers aged 15 to 17, coinciding with a time when students might be considering their future educational or work lives but in the school years (Years 10 and 12). The participants were drawn from two state comprehensive schools in similar areas within Milton Keynes in central England, and were selected purposively to represent students with a mix of both challenging and more comfortable financial circumstances at home.

The data were analysed thematically using NVIVO by two independent researchers. The report compares the current findings from those of previous research which covered broader populations (including people with White backgrounds).

Key findings

Similarities with broader populations

• Participants make the most of their day-to-day spending on lunch and snacks, show good awareness of their day-to-day spending habits, and are moderately confident about everyday money decisions.
• They save a sizeable proportion of any earned income and consider larger purchases that they would need to save up for individually.
• They talk mainly to family members about money or spending decisions, while being influenced by their friends, their own needs or desires, and social media.
• They recall elements of financial education they had received, but struggling to relate this to their everyday decisions.

Differences from broader populations

• Participants had a more acute preference for money advice from family (especially parents) as the most important and trusted source of that advice, and difficulty identifying any other trusted sources.
• Entrepreneurship featured among a small minority of students in their future plans.
• Some participants were very clear that they saved regularly for self-determined goals, rather in response to any financial education received.
• There was a focus on semi-frequent spending (e.g. on clothes), and low confidence making decisions in relation to these.
• There was a desire for financial education that is delivered at the time it has greatest relevance, is grounded in real-life experience, and through a range of channels.

Points to consider

Methodological strengths or limitations

• The authors note the exploratory and small-scale nature of their qualitative study and recommend that further qualitative, quantitative and comparative research is undertaken in this field with students from diverse backgrounds.
• It is not clear how the individual participants were selected or how influential self-selection might have been in the findings.
• The evidence the report draws on from previous research to offer comparisons between the current findings and those from broader populations is not referenced explicitly.

Applicability

• The study should be of interest to researchers and practitioners who are interested in young people's financial capability and financial education, or the particular needs and experiences of young people from Black ethnic backgrounds.

Relevance

• The study is relevant in the context of the importance placed on financial capability for the future financial wellbeing of young adults, and an increasing emphasis on the importance of financial education.