Morgan Housel, in his bestselling book The Psychology of Money, describes FOMO—Fear of Missing Out—as one of the easiest ways to go broke or stay broke. For many African Americans, this isn’t just a financial mindset—it’s deeply rooted in history, systemic inequality, and a psychological response to long-standing exclusion. To truly understand FOMO in the Black community, we have to look at where it comes from, how it holds us back, and what we can do to change the narrative—not just for ourselves, but for generations to come.
The Roots of FOMO in the Black Experience
Historically, African Americans have been locked out of wealth-building opportunities for centuries. From slavery to redlining, from being excluded from the GI Bill to the racial wealth gap today, the desire to “catch up” has always existed—and understandably so. When you’ve been shut out of the American Dream for generations, it’s natural to want a piece of it once doors begin to open.
This has created what some sociologists refer to as “compensatory consumption”—spending money to make up for what you (or your ancestors) were denied. Dr. Thomas Shapiro, a leading scholar on wealth inequality, notes in his research that many African Americans view spending—especially on visible, high-status items—as a way to assert dignity in a system that has historically devalued their worth.
In simple terms, FOMO in the Black community isn’t just about wanting the newest iPhone or designer sneakers. It’s often about feeling like you finally can—and sometimes, like you have to, in order to be seen, respected, or included.
Why FOMO Is Financially Dangerous
The numbers tell a sobering story. According to the Federal Reserve’s 2022 Survey of Consumer Finances, the median net worth of white families was $285,000, compared to just $44,900 for Black families. That’s more than a sixfold difference. The reasons are complex and systemic, but FOMO spending habits can widen this gap even further.
In a 2018 Prudential Financial study, 63% of African Americans said they wished they had more financial education. At the same time, Black households were found to be more likely than white households to spend on luxury goods relative to their income. The study suggests this spending is driven not by irresponsibility, but by social pressures—status signaling, social media comparisons, and cultural expectations.
Sociologist Juliet Schor’s concept of “the new consumerism” adds another layer. She argues that people now compare their lifestyle to a much wealthier reference group—thanks to Instagram, reality TV, and influencer culture. That’s FOMO in action: watching others and feeling like you’re falling behind, even if those others are in an entirely different income bracket.
How to Escape the FOMO Trap
- Awareness is the first step. Recognize when FOMO is driving your spending decisions. Ask yourself: Am I buying this because I need it—or because I’m afraid of how I’ll be perceived if I don’t?
- Set clear financial goals. Whether it’s buying a home, paying off debt, or saving for your kids’ college, having a concrete goal keeps you grounded. It becomes easier to say “no” to the latest trend when you have a bigger “yes” you’re working toward.
- Automate your financial habits. Use technology to protect yourself from your impulses. Apps like Digit, Acorns, or Wealthfront can help you automate savings and investments. Set up automatic transfers to your savings or Roth IRA on payday—before you get a chance to spend it.
- Track your progress and celebrate smart wins. Financial success doesn’t have to be boring. Treat budgeting like a game: monitor your credit score, track your net worth, and reward yourself for hitting savings milestones—with experiences, not stuff.
- Surround yourself with financially-minded people. Community matters. Join online financial literacy groups, follow Black wealth creators like Tiffany “The Budgetnista” Aliche or Rashad Bilal and Troy Millings of Earn Your Leisure. Their content helps normalize smart money moves in a culture where “getting the bag” can often mean spending it.
It’s Bigger Than You: Building Family Legacy
The decisions you make with your money today will echo for generations. According to a 2020 McKinsey & Company report, if the racial wealth gap were closed, it could add $1–1.5 trillion to the U.S. economy by 2028. That’s not just about national growth—it’s about your family, your community, and your legacy.
Imagine your children starting adulthood with savings, home equity, and financial literacy—not student loans and paycheck-to-paycheck stress. That’s the power of intentional money moves. It’s not about flexing for the moment—it’s about freedom in the future.
So the next time FOMO creeps in, remember this: real power isn’t in keeping up. It’s in pulling ahead, slowly and strategically, so the next generation doesn’t have to sprint just to catch up.
You don’t have to live like you’re broke to prove that you’re not. You just have to think differently—and act intentionally.