Supporting a Culturally Responsive Approach to Financial Literacy

Abstract: This narrative literature review interrogates the racialized dimensions of financial literacy in the United States, with a specific focus on the African American community. While conventional frameworks define financial literacy as a set of objective skills necessary for budgeting, saving, and investing, such approaches often overlook the socio-structural realities that constrain financial decision-making among marginalized populations. Drawing from a synthesis of empirical studies, policy reports, and theoretical literature, this review reconceptualizes financial literacy as a multidimensional construct shaped by systemic inequality, economic precarity, and adaptive expertise. Disparities in financial knowledge and capability are shown to be tightly linked to broader patterns of racial wealth stratification, income volatility, and discriminatory access to credit. Although African Americans demonstrate resourceful financial behavior, particularly in debt management, persistent gaps in areas such as insurance literacy and investment knowledge reflect both historical exclusion and contemporary neglect in financial education policy. The review critiques deficit-based models that ascribe financial fragility to individual failure, instead advocating for a more expansive approach of engagement, education, and strategy. This inquiry underscores the urgent need for equity-centered policies that go beyond instructional remedies to address the racialized architecture of economic opportunity. Ultimately, the findings call for a paradigmatic shift in how scholars, educators, and policymakers conceptualize, measure, and promote financial literacy in racially diverse contexts. Keywords: Financial Literacy, Racial Wealth Gap, African American Finance, Structural Inequality, Critical Financial Literacy, Financial Precarity, Financial Education Policy JEL Codes: D14, G53, I24, J15, I38