Race and the Financial Toolkit: Bridging Cultural Theories to Understand Behavior and Decision Making in the Racial Wealth Gap

Abstract

In this article, I theorize the “financial toolkit” or the repertoires that inform financial decision-making processes and explain why and what racial differences we should expect. I argue that while prior literature has focused on financial repertoires with large racial differences, we should expect both similar and distinct financial repertoires by race given that social networks and neighborhoods of residences are racially segregated, but mainstream media sources and national narratives create common financial discourses. Using data from the 2019 Survey of Consumer Finances, I show that while Black, Latinx, and White respondents all draw on social network and media sources for information about finances, that the financial practices they identify as ideal are only similar when articulated as broad, vague practices. Racial differences emerge among specific financial behaviors about how to engage with money. These findings contribute to our understandings of how culture contributes to the racial wealth gap, how institutions contribute to cultural toolkits, and how race informs behavior and decision-making.