Advice in the personal finance community has always been catered toward at those who already have money to spare. Even with the audience broadening in recent years, many aspects of the money business continues to exclude the impoverished.
Those who perpetuate these aspects also feed into continuing wealth disparity by scaring poor people away from the very community that could teach them what they need to improve! Checking your financial privilege is the first step to creating a more welcoming community built on self-improvement and perseverance.
How is the personal finance community silencing the impoverished?
Now, I’ve only been involved in this community for a couple years. The things I’ve listed below are what I, as a poor person, find trouble with. I’m sure it’s an incomplete list! If you’ve experienced judgment or exclusion in this community in other ways, please comment below!
No-spending and savings challenges
Bridget has already denounced the popular saving challenges because of the inefficiency of the strategy in general. But “challenges” proposing a specific, proposed amount of money saved each week are always at least a little presumptuous.
I’m sure to many it doesn’t seem like a huge deal to put aside a couple of dollars each week. But more most people in poverty, each week is already down to the dollar. I’ve used the last two dollars in my bank account to buy bread more times than I can count.
A little bit of money is still money. And many of us don’t have a choice when it comes to how we use our money.
Judgment towards those who are financially “behind”
The personal finance world is structured around milestones we should all work towards. People are encouraged to have a specific amount of money saved for retirement at each age or to aim to follow their age demographic’s average in statistics such as net worth and salary.
As a result, those who haven’t achieved these milestones are inundated with the feeling of being “behind” on their finances. Scrutiny is put on anyone without a retirement fund, a TFSA, or even general financial literacy. This discouragement could lead to the very same people who need to be involved in the personal finance community the most distancing themselves even further!
Claiming the secret to making money is to … spend money
This concept manifests in a lot of different ways, but the most extreme of which is people (usually financially privileged white men) sharing the “secret” of how to make money. This secret, sometimes paid for by vulnerable people, is to invest an ungodly amount of money on a safe, foolproof account that ensures profitable return.
Where to even start? If your advice on how to get rich is to spend money, then you are obviously targeting your approach to those who already have financial stability. No offense to those who do this – use your money to make money! By all means!
But if you’re advertising that as a “secret” that will rid you of financial hardship, it seems a little unrealistic.
There are also less extreme (but a lot more common) versions of this advice. In fact, almost all of the money tips and tricks I see assumes at least some level of prior stability. For some it really is as simple as deciding to put a set amount in your TFSA this month, but for those in poverty that’s totally unattainable.
If you live in poverty and you still want to be a part of the personal finance community, you are forced to dig relentlessly for any content that could even remotely apply to your life.
Exclusive word use
We’ve all seen this one, I’m sure! People using words that exclude and silence poor people can take form in a lot of different ways. One I see often is “I’m so poor!” or variations of this phrase … When you really aren’t. In fact, I usually see this from people who are incredibly financially privileged.
If someone who can’t buy new shoes this week is “poor,” what are poor people?
There are a lot of incredibly common phrases that can be seen as exclusive too. For example, when people tell me they’re “starving,” it hurts a little bit. Obviously common ones like these poor people can’t expect to see change. But those with financial privilege should at least know how hard it is for a poor person to listen to these phrases.
How can we reduce the glorification of financial privilege?
Listen to poor people
This is the most obvious solution. We need more poverty perspectives in personal finance! One in seven Canadians live in poverty! That’s a lot of us!
Thankfully, Money After Graduation has given me a platform to tell my story. But I encourage other platforms to consider seeking out a poverty perspective. I also encourage my fellow impoverished writers to be forthcoming and brutally transparent when it comes to financial hardships! This can empower other people living in poverty and create solidarity.
Acknowledge your own privilege
Although the most important step is to validate and amplify the voices of those in poverty (especially those who contribute to the personal finance community), we could also benefit from the financially privileged owning up to their advantages.
The only thing worse than not being heard is watching someone who could never understand your position speak for you. If you consider yourself a member of the personal finance community (or even if you don’t), checking your financial privilege should be a regular occurrence. Not every bit of content needs to include a poverty perspective, but sensitivity to those experiencing financial hardship is crucial.
Ask yourself these questions to check your financial privilege:
Do you have to worry about the wage gap?
Women are predisposed to a tougher time when it comes to achieving financial goals. One of the ways this presents is in the wage gap, and if you are non-white or LGBTQ+, this gap is much more dramatic. Some examples: heterosexual males out-earn any other sexual orientation, and white people are more likely to get raises.
Members of marginalized communities have to go through their lives frequently getting paid less for the same work as their privileged colleagues, often without their knowledge and beyond their control. They also often start off on uneven playing fields. Especially people like Black Americans, who have to fight decades of aggressive social depravity every step of their professional lives.
Not only this, but it’s also been proven that a day-to-day life costs more if you’re a Person of Colour or LGBTQ+. That includes health costs, mental health care, and costs directly related to escaping discrimination like hate speech or threats in public.
Essentially, life is much cheaper for a straight white man.
Do you suffer from food insecurity?
Food insecurity is defined as a lack of access to food because of an inability to afford it.
Unfortunately, Canada is especially bad when it comes to food health. One in six Canadian children suffer from household food insecurity, and 850,000 Canadians rely on food banks every month in order to get the bare minimum they need to survive. Also, Canada is the only G7 country that doesn’t have a national food program.
If you are frequently fed, and especially if you have the opportunity to live according to preferential diets, then that in itself is a financial privilege.
Do you have a place to live?
Although the number is likely much higher, it’s estimated that at least 235,000 Canadians experience homelessness in any given year. Once we look at the number of those in abusive houses and hoping to escape, those in unsafe living conditions skyrockets.
A roof over your head is something to be grateful for, of course. But a home where you feel safe is a dream unattainable for many Canadians. And a comfortable home life is sure to directly improve every other aspect of your life, including your income opportunities.
If an unexpected expense reared it’s ugly head this month, would you still have food and a roof over your head?
A very popular recent study states that over half of Canadians are $200 or less away from not being able to pay bills. Essentially, budgets are so tight that an emergency fund is absolutely necessary.
But many Canadians are also ill-prepared for a financial emergency. Approximately 49% of Canadians don’t have any savings for an emergency. This means if an emergency costing $200 comes up, a good chunk of us are screwed.
The opportunity to build an emergency fund is another financial privilege. Of course, savings in general requires at least some form of stability. Remember that some Canadians are consistently struggling to make ends meet, and therefore haven’t been able to plan for the future.
Are you using your money to make more money?
Are you frequently putting money away in a TFSA, GIC, or another saving strategy? Maybe even more importantly, are you investing in the stock market?
Although very possible to invest, or at least diligently save, on a very tight budget, poverty is a little different. As someone who’s bought groceries with quarters I’d collected through the month, I know what it’s like to not have a dollar to spare.
Canadians are notoriously overwhelmed by the concept of investing, and financial insecurity doesn’t help! Many of us simply don’t have to chance to use our money to make more money. Of course, missing out on these money-making opportunities only slows our financial progress down even more.
Depending on how long someone is unable to invest and save, they could miss out on thousands of dollars of returns.
Again, this is obviously not a complete list of the struggles those in poverty face. But they’re some especially eye-opening examples, considering the danger that comes with financial insecurity. Most Canadians in poverty are trying to catch up with everyone else while jumping hurdles that other racers don’t have to jump. It’s the duty of those in the personal finance community to be aware of these hurdles, and to create an open and accepting space regardless of progress!