These days, I’ve become increasingly alarmed by the growing pattern of recklessness and neglect that seems to govern the management of our personal finances. Recent actions—or I should say inaction—by large numbers of African Americans have prompted me to suggest taking a bold step and declare a state of financial emergency. I make this assertion not for dramatic effect but to bring attention to the need for us to take corrective measures. If not, this self-destructive behavior will continue to threaten the future of our families for generations to come.

Let me give you an example. I recently discovered much to my dismay, that 21.7% of African American households are “unbanked,” while 31.6% are “underbanked,” compared with 3.3% and 14.9% of white households, respectively. What does this mean? As a member of the unbanked, you’re walking around without a checking or savings account. The underbanked rely primarily on nonbank money orders, check-cashing establishments, and payday loans to conduct transactions.

By refusing to use traditional banking services, a sizable segment of our community is accepting what I consider a form of second-class citizenship, relegating themselves and their families to a financial underclass. Without access to checking and savings accounts or credit and debit cards, engaging in basic activities such as renting cars and booking hotels becomes difficult—if not impossible. Moreover, the inability to establish a solid credit rating derails any chance of buying a home, the cornerstone of wealth-building.

Many avoid financial institutions for one reason: fear. Last year’s financial crisis provided some with an excuse to maintain their outmoded mattress finance mentality. But the Federal Deposit Insurance Corp. has insured checking and savings accounts for 76 years (the coverage limit for depositor accounts currently stands at $250,000), and not one depositor has ever lost a cent. Moreover, you have to ask yourself whether a major bank has a better chance of going out of business than the local check cashing store.

I know some of you may believe this issue of being unbanked doesn’t have anything to do with you. After all, those who fall in the unbanked category reside in relatively low-income households—at least 71% had annual earnings of less than $30,000. But this money management phobia and lack of discipline is endemic across economic stations. For instance, Insight Center for Community Economic Development reported that 42% of whites invested in an IRA or Keogh plan for retirement versus a mere 7% of African Americans. And the Ariel Education Initiative and consulting firm

Hewitt Associates found that African Americans overall were more than 10 percentage points less likely to participate in 401(k) plans than were their white counterparts: 66% of blacks invested in their company programs compared with 77% of whites.

We must stop this madness. On several levels, many of us have sabotaged our prospects to achieve multigenerational wealth. Do we really want to leave these bad habits as our legacy to the next generation?

Each of us must renew our commitment to financial literacy. That’s why for years I’ve charged our editors to beef up our personal finance coverage through Wealth for Life. I wanted to ensure that we served our audience at every stage of their personal and professional development, from a college graduate trying to devise a financial program to a retiree seeking to refine a comprehensive estate plan. You see, individuals must learn the basics—the practicality of saving, the power of compounding, and the advantages of smart consumerism—as much as they need to gain a full understanding of economic indicators and market dynamics.

Even with the fragile economy, African Americans today have more education and earning potential than previous generations. Our circumstances may be pressing, but they are far from hopeless. We have the tools and intellect we need to advance. We must embrace the fact that lifelong financial literacy leads to empowerment. Wealth for life must be our way of life.

By: Earl “Butch” Graves Jr. , CEO,  Black Enterprise