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Recent banking woes have made a recession more likely, while lenders will make it more difficult to borrow money, personal finance expert Suze Orman told CNBC.com.
That means having cash set aside for an emergency is “absolutely vital,” she said.

Suze Orman
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The recent failures of Silicon Valley Bank and Signature Bank have made a recession more possible — and that means it’s more important than ever to have emergency savings set aside, according to personal finance expert Suze Orman.
“Because of what is happening with banks, it is obvious that a recession is more likely coming than not,” Orman told CNBC.com in an interview.

Moreover, creditors will most likely tighten their lending standards, which may make it harder for consumers to access new loans or lines of credit, she said.
“Everything is going to tighten up,” Orman said.
Evidence that a shift is underway can already be seen with companies such as Amazon announcing mass layoffs, she said.
To prepare for the new economic reality, there is one crucial step individuals should take, she said.

“There has never been a time that as much as right here and right now in the recent past that an emergency savings account is vital, absolutely vital,” Orman said.

Experts generally recommend setting aside at least three to six months’ expenses in case of an emergency.
Orman has made it her mission to get more people to save money in case of emergencies. In 2020, she co-founded SecureSave, a company working with employers to provide emergency savings accounts to employees.
The focus, she said, is not new.
“If you go back through my entire history of almost 40 years now, I’ve been [saying] emergency savings, emergency savings, emergency savings,” Orman said.
But now is the first time that goal is as urgent as it was in 2008, she said.

How your emergency fund deposits are insured

An important part of emergency savings is easy access, which means most people are looking at some kind of high-yield savings account. The recent bank failures have inspired a new focus on whether deposits — including your emergency fund — are insured.
Generally, the Federal Deposit Insurance Corporation guarantees up to $250,000 per depositor, per insured bank, per account ownership category.
For deposits at federally insured credit unions under the National Credit Union Administration, the terms are similar. The typical coverage amount is $250,000 per share owner, per insured credit union per account ownership category.
Consumers should be mindful there are eight categories of accounts to which the $250,000 coverage applies, according to Orman. That includes individual deposit accounts, such as checking, savings and certificates of deposit; some retirement accounts, such as individual retirement accounts; joint accounts; revocable trust accounts; irrevocable trust accounts; employee benefit plan accounts; corporation, partnership or unincorporated association accounts; and government accounts.
Of note, you do have to have your money in bank or credit union accounts to which the federal coverage applies, according to Orman. Investments such as stocks, bonds, mutual funds or annuities are generally not covered by federal insurance, even if you purchase them from a bank or credit union.
The $250,000 limit was established by post-financial crisis legislation in 2010.
However, uninsured deposits above that threshold were guaranteed for the recent bank failures. Both President Joe Biden and Treasury Secretary Janet Yellen have said that could be adjusted again, if the situation calls for it.
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In the meantime, you do not necessarily have to move your money to another financial institution to have deposits over $250,000 insured, Orman emphasized.
Because the coverage is per account category, you may also amplify the amount of insured balances by having different kinds of accounts, such as savings, IRA or trust accounts, she said. Generally, deposit accounts are eligible for $250,000 coverage for the sum of accounts at an institution in this category, which includes checking accounts, savings accounts, certificates of deposit or money market deposit accounts.
However, if you have a joint account where you are a 50% owner, you may get another $250,000 of protection. The same goes if you have a trust account or an IRA account that invests in savings vehicles such as CDs or money markets. IRAs invested in stocks, bonds or mutual funds do not qualify.
Additionally, by adding two or more beneficiaries, you can get an additional $250,000 in coverage per beneficiary, as long as the account’s deposits are eligible for protection, she said. The maximum per account is five beneficiaries, or $1.25 million. This applies to revocable or irrevocable trust or custodial accounts, she noted.
Online tools can help you assess your FDIC and NCUA coverage.

Who needs to worry now

The bigger concern people should worry about is what financially may happen as time goes on, Orman said.
“For those people who don’t have any savings at all, they now really, really need to be worried,” Orman said.
We are now living in a “very, very, very precarious time — almost more precarious than the pandemic,” she said.
As expenses have gone up, people’s savings have diminished. Meanwhile, people have taken on more debt, and there are signs that some lenders are starting to tighten standards.
But today’s banking woes are “very, very different than 2008,” Orman said.
“In 2008, you had all those loans that nobody knew how to value,” she said.
Today, most people have their money insured.
“So individuals with money in a bank or credit union, I would not be afraid,” Orman said.
But you do need to remember the only person who can save you is you, she said.
That goes for making sure your money is safe and sound, that you are saving for emergencies, that you are investing for retirement, that you are getting out of debt, that you are living below your means and that you are getting more pleasure from saving than spending.
“Who is going to do that for you? Nobody but you,” Orman said. More

This year, “Ivy Day” — when many Ivy League schools release admissions decisions — falls on March 30.
Although acceptance into the Ivy League is considered highly desirable, this year’s ultimate “dream” college is Massachusetts Institute of Technology, according to The Princeton Review.
Now, students have just a few weeks to figure out where they will go and how they will pay for it.

March 30 is “Ivy Day,” when many Ivy League schools release those long-awaited admissions decisions.
More than ever, acceptance into the Ivy League is considered highly desirable; however, when it comes to this year’s ultimate dream school, Massachusetts Institute of Technology comes out on top, according to a recent survey of college-bound students and their families by The Princeton Review.

The colleges that ranked the highest on students’ wish lists are “perennial favorites,” according to Robert Franek, The Princeton Review’s editor-in-chief. They are also among the most competitive: MIT’s acceptance rate is just under 4%; at Harvard, it’s about 3%.

Coming out of the pandemic, a small group of universities, including many in the Ivy League, have experienced a record-breaking increase in applications this season, according to a report by the Common Application.
The report found application volume jumped 30% since the 2019-20 school year, even as enrollment has slumped nationwide.
“There’s a subconscious consensus that it’s only worth going to college if you can go to a life-changing college,” said Hafeez Lakhani, founder and president of Lakhani Coaching in New York. 
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For students who don’t get in to their top choice, use this opportunity to revisit other schools or consider transferring down the road, advised Eric Greenberg, president of Greenberg Educational Group, a New York-based consulting firm. “Realize that you are really making a one-year commitment.”
This can also serve as an important lesson for future applicants, according to Christopher Rim, president and CEO of Command Education. “It’s not just about having top grades and test scores,” he said.
“Decision letters from top schools are a reminder of the importance of crafting a balanced college list, honing their interests to convey a singularity of focus, and starting early in the process.”

National College Decision Day is only weeks away

Now, students have just a few weeks to figure out which college they will attend ahead of National College Decision Day on May 1, as well as how they will pay for it. 
Most college-bound students and their parents say affordability and dealing with the debt burden that often goes hand in hand with a college diploma is their top concern, even over getting into their first-choice school, according to The Princeton Review’s 2023 College Hopes & Worries survey.
A whopping 98% of families said financial aid would be necessary to pay for college and 82% said it was “extremely” or “very” necessary, The Princeton Review found.
“Financial aid is more a necessity now than ever,” Franek said.  

Arrows pointing outwards

Don’t just look at the sticker price

“Never cross an expensive school off of your list of consideration based on sticker price alone,” Franek said. Consider the amount of aid available, since private schools typically have more money to spend.
“Many of those schools are giving out substantial scholarships — this is free money.”
For example, even though MIT is among the nation’s priciest institutions — tuition and fees, room and board and other student expenses came to more than $79,000 this year — it also offers generous aid packages for those who qualify.
Last year, the average annual price paid by a student who received financial aid was less than $20,000, according to the school. 
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Smart Tax Planning

While the chances of an IRS audit have been slim, the agency may scrutinize your return for several reasons.
Some red flags for an audit are round numbers, missing income, excessive deductions or credits, unreported income and refundable tax credits.
The best defense is proper documentation and receipts, tax experts say.

Jeffrey Coolidge | Photodisc | Getty Images

This tax season, there have been heightened concerns about IRS audits as the agency begins to deploy its nearly $80 billion in funding.
While the IRS plans to hire more workers, including enforcement agents, experts say there’s no need to worry — as long as you keep proper documentation.

Still, certain red flags are more likely to trigger an IRS audit, experts say. “Round numbers are a dead giveaway,” said Preeti Shah, a certified financial planner at Enlight Financial in Hamilton, New Jersey. She is also a certified public accountant.
Here’s why round numbers catch the agency’s attention, and three more closely watched factors.

More from Smart Tax Planning:

Here’s a look at more tax-planning news.

1. Round numbers

When claiming tax breaks, it’s important to use accurate numbers rather than estimates on your return, experts say. Round numbers indicate you’re estimating.
For example, if you’re a sole proprietor with $5,000 for advertising, $3,000 for legal expenses and $2,000 for support, “the IRS knows you’re just winging it,” Shah said.

2. Missing income 

A key issue that may trigger an IRS audit is missing income, according to John Apisa, a CPA and partner at PKF O’Connor Davies LLP.

Your tax return must match the income reported by companies and financial institutions or you may get an automated notice from the IRS. For example, it may be easy to skip Form 1099-NEC for contract work or Form 1099-B for investment earnings, he said. 
You should wait to file until you have all your documentation in hand and check to make sure what you entered matches what’s on the forms. “You have to be careful, even with the simpler stuff,” Apisa said. 

3. Excessive tax breaks compared to income

Another possible tipoff is attempting to claim credits or deductions that seem too high when compared to your income, Apisa said. 
When your tax breaks don’t align with what’s expected for your income level, “there’s usually a flag there,” he said. For example, if you have $90,000 of earnings with $60,000 in charitable deductions, that may set off an alarm in the IRS system, he said.

4. Earned income tax credit

The IRS has also examined refundable credits, which can provide a refund even when the credit value exceeds taxes owed.
While audits have declined overall, the drop has been lower for filers claiming the earned income tax credit, or EITC, targeted at low- to middle-income workers. “That’s usually one of the ones that gets scrutinized more,” Apisa said.
Between fiscal years 2015 and 2019, audits dropped by 75% for taxpayers making $1 million or more, and 33% for filers claiming the EITC, according to a 2021 report from the Treasury Inspector General for Tax Administration. 
More focus on the EITC has also contributed to higher audit rates among Black Americans, a recent study found.

How to protect yourself from a future IRS audit

Ilkercelik | E+ | Getty Images

“People are scared to death of the IRS,” said Karla Dennis, an enrolled agent and founder of Karla Dennis and Associates. “They don’t understand how the system works, and so they’re extremely fearful of audits.”
But the best way to protect yourself is by staying organized, with receipts and records to show proof of income, credits and deductions, she said.
Depending on your situation, it may be necessary to keep tax records for up to seven years, according to the IRS.
But if you’re missing a receipt, copious records may provide the narrative needed to back up your position in an audit, Dennis said.
“Document, document, document,” she added.  More

Many mutual funds in 401(k) plans charge a revenue-sharing fee.
Employers sometimes opt to allocate those fees to plan expenses like administration and record keeping.
Revenue-sharing fees differ according to the fund an investor selects. That means some workers pay more for services than others.

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Workers who participate in a company 401(k) plan pay fees for a host of associated services. Among them is the cost of administering the plan — for example, tracking daily fluctuations in account value, facilitating trades and issuing regular notices to investors.
But based on how your employer structures its retirement plan, you may unknowingly be subsidizing colleagues’ 401(k) fees.

The dynamic is a function of the investments you choose and how the 401(k) plan pays costs for administrative expenses.
Retirement savers (like players in the broader investment world) may be unaware of the fees they pay. Many financial firms inside and outside the 401(k) ecosystem often levy an annual fee directly from client accounts instead of asking them to write a check.
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Mutual funds in 401(k) plans are no different.
The overall cost of those funds may include a “revenue-sharing” fee (also known as a 12b-1 fee, a distribution fee or shareholder services fee, for example). The fund manager collects this fee and then passes it along to the 401(k) plan’s administrator.

This behind-the-scenes infrastructure is how many plans pay for record-keeping and other services delivered by firms such as Fidelity Investments, Empower Retirement and TIAA-CREF, which are among the largest 401(k) administrators.

Small plans more likely to use revenue sharing

Just 8% of workplace retirement plans such as 401(k) plans use revenue sharing to pay for plan administration, according to a recent annual survey published by Callan, a consulting firm. That’s down from 16% last year and about 40% a decade earlier.
However, its prevalence may be more widespread than the Callan survey suggests. The bulk of respondents have workplace retirement plans with more than $1 billion in worker savings — among the largest in the country.

But small 401(k) plans use revenue sharing more often to pay for services. A separate poll by the Plan Sponsor Council of America, an employer trade group, across a broader swath of plan sizes indicates almost 40% use funds with revenue sharing, and about three-quarters of those employers use the fees to pay for plan expenses.

‘There can be some inequalities’ for workers

This fee sharing is a somewhat opaque practice since it occurs behind the scenes. The practice also sometimes leads some workers to pay more for 401(k) administration than their peers — effectively subsidizing the service for colleagues.
That’s because not all investment funds carry a revenue-sharing fee. For example, actively managed funds levy such a fee more often than index funds. (Of course, there are exceptions.)
“There can be some inequalities in terms of who’s paying for what,” said Greg Ungerman, a senior vice president at Callan who leads a team working with workplace retirement plans.
The dynamic means a saver invested solely in index funds may not pay any revenue-sharing fees for 401(k) plan expenses, whereas another worker in the same 401(k) plan invested solely in actively managed funds may pay the fees.

There can be some inequalities in terms of who’s paying for what.

Greg Ungerman
senior vice president at Callan

Hence, the latter subsidizes costs for the former, even though they get the same services.
Employers have begun moving away from the practice, amid a flurry of lawsuits around excessive 401(k) fees and federal fee-disclosure rules to boost transparency, which were adopted about a decade ago.
Furthermore, money managers have increasingly offered versions of their investment funds that strip out a revenue-sharing fee. In this case, a 401(k) administrator would deduct a fee for their services from workers’ accounts separately, instead of getting paid by the fund manager directly.
Many employers have indeed shifted toward this type of fee model, Ungerman said. Often, that takes the form of a flat fee expressed in dollars, charged per plan participant.

Sometimes, employers may not have much of a choice — they are somewhat at the mercy of the investment firms. A particular mutual fund family may always include revenue sharing, for example.
But technology has evolved such that many plan administrators are able to capture the revenue-sharing fee and funnel the money back to the investor who paid it — a workaround to make the 401(k) plan more equitable. However, this function isn’t always available, and the employer has to choose the option.
“It’s up to the plan sponsor to make that determination,” Ungerman said. More

Half of parents with a child age 18 or over provide them with at least some financial support, according to a recent report.
For parents, however, supporting grown children can be a substantial drain at a time when their own financial security is at risk. 
“Kids have to realize that the quid pro quo here is that they’re going to be expected to take care of their parents,” says economist Laurence Kotlikoff.

To keep up with rising costs, many young adults turn to a likely safety net: their parents.
From buying groceries to paying for their cell phone plan or covering health and auto insurance, 45% of parents with a child age 18 or over provide them with at least some financial support, according to a recent report by Savings.com.

On average, these parents are spending more than $1,400 a month helping their adult children make ends meet, the report found.
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In the last year, inflation has posed a challenge for those trying to achieve financial independence. Soaring food and housing costs are just some of the significant hurdles for young adults just starting out.
For parents, however, supporting grown children can be a substantial drain at a time when their own financial security is at risk. 
And parents nearing retirement contribute the most to their children — to the tune of about $2,100 a month, on average, while putting only $643 a month into their retirement accounts, Savings.com found. 

Overall, America’s retirement preparedness has declined as the economy has faltered, Fidelity’s 2023 Retirement Savings Assessment also found. In 2020, 83% of savers had the income they would need to cover estimated expenses during retirement. Now, only 78% do.
With their retirement security in jeopardy, nearly half, or 48%, of retired Americans believe they’ll outlive their savings, according to a separate report by Clever Real Estate.

‘It has to go both ways’

“Everybody is everyone else’s lifeboat when it comes to hitting an iceberg,” said Laurence Kotlikoff, economics professor at Boston University and president of MaxiFi, which offers financial planning software.
However, “it has to go both ways,” Kotlikoff said. “Parents are providing a lot of support, and the kids have to realize that the quid pro quo here is that they’re going to be expected to take care of their parents.”
Having an open dialogue can help, he added. “Once that conversation gets going, it can continue for the next 40 years.”Subscribe to CNBC on YouTube. More

After being suspended three years, federal student loan payments are expected to resume soon.
But borrowers have options to keep the bills on pause.

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Payments likely to resume within months

The Education Department in November said student bills would resume 60 days after the litigation over its student loan forgiveness plan resolves. If the high court hasn’t ruled on the plan by the end of June, or if the Education Department is unable to carry out its relief by then, the bills will pick up at the end of August.
It’s possible the White House could try to extend the pause again, Kantrowitz said. He noted that the Education Department had said on two occasions that a previous extension of the payments pause would be the final one — only to prolong the pause yet again.
Still, it would be wise for borrowers to be prepared for the bills to resume sooner rather than later.

Deferments may keep interest from accruing

When the break ends, you may be able to postpone your student loan payments for more time by requesting a deferment or a forbearance.
Borrowers should first see if they qualify for a deferment, because their loans may not accrue interest under that option, whereas they almost always do in a forbearance, experts say.
If you’re unemployed when student loan payments resume, you can request an unemployment deferment with your servicer. If you’re dealing with another financial challenge, you may be eligible for an economic hardship deferment.

Those who qualify for a hardship deferment include people receiving certain types of federal or state aid and anyone volunteering in the Peace Corps, Kantrowitz said.
With both a hardship and an unemployment deferment, interest generally doesn’t accrue on undergraduate subsidized loans. Other loans will rack up interest, however.
The maximum time you can use an unemployment or hardship deferment is usually three years per type.
Other, lesser-known deferments include the graduate fellowship deferment, the military service and post-active duty deferment and the cancer treatment deferment.

Forbearances also keep bills on hold

Student loan borrowers who don’t qualify for a deferment may request a forbearance.
Under that option, borrowers can keep their loans on hold for as long as three years. However, because interest accrues during the forbearance period, borrowers can be hit with a larger bill when it ends.
Kantrowitz provided an example: A $30,000 student loan with a 5% interest rate would increase by $1,500 a year under a forbearance.

A deferment or forbearance should be a last resort, but they are better than defaulting on the loans.

Mark Kantrowitz
higher education expert

If a borrower uses a forbearance, he recommends they at least try to keep up with their interest payments during the pause to prevent their debt from increasing.
“A deferment or forbearance should be a last resort, but they are better than defaulting on the loans,” Kantrowitz said.
Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit, said she recommends borrowers only use a forbearance or deferment for short-term hardship, including a sudden big medical expense or period of joblessness.
Struggling borrowers are best off finding a payment plan they can afford, said Mayotte. 

Other options for struggling borrowers

Income-driven repayment plans aim to make borrowers’ payments more affordable by capping their monthly payments at a percentage of their discretionary income and forgiving any of their remaining debt after 20 or 25 years.
Currently, the Biden administration is working to roll out a new repayment option under which borrowers would pay just 5% of their discretionary income toward their undergraduate student loans. The savings would be huge.
According to an example provided by Kantrowitz, a borrower who made $40,000 a year would currently have a monthly student loan payment of around $151 under the existing Revised Pay As You Earn Repayment, or REPAYE, plan. But with the new option, that monthly bill would plummet to $30.
And some borrowers wouldn’t owe anything each month.
To determine how much your monthly bill would be under different plans, use one of the calculators at Studentaid.gov or Freestudentloanadvice.org. More

Social Security may no longer be able to pay full benefits by the 2030s if no changes are made sooner.
While lawmakers contemplate possible fixes, a new web tool from the American Academy of Actuaries lets you decide exactly exactly what changes should be made.

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You may have heard that Social Security’s funds are running low.
If that doesn’t change, that may interfere with the program’s ability to pay full benefits in the next decade.

Now, a new virtual tool from the American Academy of Actuaries lets you explore Social Security’s woes and decide exactly what changes you would make to restore its solvency.
The journey starts in Townsville, a virtual city that aims to show the perspective of everyday Americans, according to the web app created by the nonpartisan professional organization.
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At the outset, users learn the dilemma Social Security currently faces. Based on the Social Security Administration Board of Trustees’ annual 2022 report, the funds may be depleted in 2035. At that point, 80% of benefits would still be payable.
“A common misconception is that the trust fund exhaustion would mean Social Security benefits could not be paid at all,” said Linda K. Stone, a senior pension fellow at the American Academy of Actuaries.

The urgency of Social Security’s issues has caught lawmakers’ attention recently.
During the State of the Union address in February, President Joe Biden prompted leaders from both sides of the aisle to stand to show their support for protecting Social Security and Medicare.

But solving the program’s woes won’t necessarily be clear cut.
Generally, it will require either raising taxes, cutting benefits or a combination of both.
Multiple proposals have been put forward in Congress. However, the difficulty is getting both sides of the aisle to agree. For any Social Security reforms to pass, they must have bipartisan support.
“When you’re dealing with Social Security, it’s really important for everybody involved from a political standpoint to be willing to hold hands and jump together,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center.

‘More needs to happen’ to fix Social Security

By using the American Academy of Actuaries’ web app, titled “The Social Security Challenge,” players may visit different locations in Townsville to hear locals’ opinions and concerns about the future of the program.
At locations like the park, the gym and the post office, residents discuss their concerns or opinions about possible changes such as increasing the amount of payroll taxes the wealthy pay or increasing benefits for the lowest earners.
Players can also access a journal with notes that provides key information on the topics they’ve heard.
Once they have explored all the locations in Townsville, users then go to Town Hall, where they can decide exactly what changes they would make to improve the program.

Users learn about the wide variety of options available to address the insolvency issues …

Linda K. Stone
senior pension fellow at the American Academy of Actuaries

Users are presented with nine buckets of options. They may choose from all, some or none of the buckets when choosing from the menu of reforms.
Notably, this may include improvements to benefits that add costs, as well as other changes that would result in savings.
This may include changes to help bring in more revenue into the program, such as applying payroll taxes to earnings over $250,000. In 2023, those levies are capped at $160,200 in earnings.
Or it may include benefit increases such as changing annual cost-of-living adjustments to be more generous or making it so years out of the work force devoted to childcare are included toward Social Security benefit calculations.
“The important point is that users learn about the wide variety of options available to address the insolvency issues and the different impacts of adopting some of these options,” Stone said.

As policy makers’ debate over Social Security’s future heats up, the tool may help increase the public’s understanding of the discussions, Stone said.
The tool may also help them see that implementing just one change — such as increasing payroll taxes — might not be a silver bullet solution to restore the program’s solvency.
“People select options that they think, ‘Oh, this will solve the problem,” and then they can clearly see, no, that’s not enough,” Stone said. “More needs to happen.”
The American Academy of Actuaries is encouraging policy makers to share the web app with constituents to educate them about Social Security and get their feedback on what changes they would like to see.
To decide how you might fix the program, check out the tool here. More

Matthew Desmond’s new book, “Poverty, by America,” explores why the U.S. poverty rate hasn’t improved in half a century.
These figures show how bad the problem is.

A woman looks through a garbage can in Manhattan in New York City.
Spencer Platt | Getty Images News | Getty Images

1. Wages rose slowly for the poorest Americans

Since 1979, the bottom 90% of income earners in the U.S. experienced annual earnings gains of only 24%, Desmond writes, while the wages of the top 1% of earners more than doubled. His findings are based on data from a number of sources, including the U.S. Bureau of Labor Statistics and the Pew Research Center.
Looking at inflation-adjusted earnings, ordinary workers have seen their pay tick up just 0.3% a year for several decades, Desmond writes. “Astonishingly, the real wages for many Americans today are roughly what they were 40 years ago.”

2. More government aid for the financially comfortable

“Most families who enjoy those subsidies have six-figure incomes and are white,” Desmond writes. “Poor families lucky enough to live in government-owned apartments often have to deal with mold and even lead paint, while rich families are claiming the mortgage interest deduction on first and second homes.”

3. 1 in 18 live in ‘deep poverty’

In his book, Desmond, analyzing data from the U.S. Census Bureau and other sources, reports that 1 in 18 people in the U.S. live in what’s considered “deep poverty,” or what he calls “a subterranean level of scarcity.”
In 2020, this category included people who make less than $6,380 a year, or families of four living on less than $13,100. In 2020, almost 18 million people in America lived in these conditions, including some 5 million children.
“There is growing evidence that America harbors a hard bottom layer of deprivation, a kind of extreme poverty once thought to exist only in faraway places of bare feet and swollen bellies,” Desmond writes.

Arrows pointing outwards

4. Racial wealth gap is as large as in the ’60s

Looking at the work of other authors and Federal Reserve data, Desmond found that the racial wealth gap is as wide today as it was more than five decades ago.
In 2019, the median white household had a net worth of $188,200, compared with $24,100 for the median Black household.
“Our legacy of systematically denying Black people access to the nation’s land and riches has been passed from generation to generation,” he wrote.
Most first-time homebuyers, he explains, get down-payment help from their parents. And many of those parents are able to assist their children by refinancing their own homes, “as their parents did for them after the government subsidized homeownership in white communities in the wake of World War II.”

5. Overdraft fees mostly paid by the poor

In 2019, the largest U.S. banks charged Americans $11.68 billion in overdraft fees, Desmond found, looking at a number of reports, including from the Center for Responsible Lending.
Just 9% of those account holders paid the lion’s share, 84%, of those charges — customers who carried an average balance of less than $350.
“The poor were made to pay for their poverty,” Desmond wrote. More