Unfortunately, there’s a societal narrative that believes only poor or first-generation people need support with money.
It stems from a stereotype that wealthier individuals and families are good with money and always know what to do with it; are always self-sufficient; and don’t require financial assistance and support. In other words, they have it all figured out.
During the formative years of my career, I worked with high-net-worth (HNW) individuals and families in the private bank. In my coaching practice, I have a few clients who are HNW – whether due to what they’ve earned and/or how they’ve invested, or because of their family’s wealth. And, I can assure you that just because they have wealth and financial security and stability and aren’t struggling to pay their bills and make ends meet, that doesn’t mean their experiences with money are free of struggles.
This, I Despise
Anyone who spends five minutes with me knows how thrilled I am that financial well-being is getting more props. I love that employers and conferences are featuring it at their wellness table.
But, a recent conversation highlighted something I’ve started to notice and it is causing me a bit of concern.
It relates to the way some are positioning financial wellness, as if it is only necessary for some and not necessary for all.
From where I sit, this runs the risk of perpetuating harmful stereotypes and amplifying several biases.
Also if you know me, I despise the phrase “financial literacy.” Although it grew in popularity in the late 90s and early aughts, what sparked its usage was the Community Reinvestment Act of 1977.
This federal law required financial institutions that did business in low- and moderate-income (LMI) neighborhoods to help meet the needs of the people who lived in those communities. To meet this requirement, the majority of the commercial banks and savings associations who opened branches in these locations opted to provide financial literacy training. However, it mainly focused on opening banking and savings accounts and teaching the basics of money management.
I know this first-hand, because I once had a year-long contract, working with a non-profit, to provide “financial literacy” training to people in transition (read: welfare to work and incarceration to work). And let me tell you, it is a flawed perception to believe that lower-income people are not smart with their money. Yet, this is inline with the stereotypes our society often holds about people who fall into this socioeconomic group.
Stereotypes & Biases
The term “first-generation” is often related to immigration, education, and/or employment. It refers to a person breaking new ground within their family. Meaning: They are the first in their family to graduate college, work in a high-earning profession, or do both.
What concerns me is that these facts can often lead some people to assume that only first-generation or people from low-income households require support with money. This, to me, is harmful and oversimplifies the complex nature of personal finance.
Plus, it’s pretty short-sighted to believe high-net-worth individuals and families don’t face challenges with money.
But, the stereotypes and biases regarding who needs support with money and why isn’t new. And, it persists for a multitude of reasons; here are three (3):
Policy initiatives
Yes, I’m thinking of the CRA of 1977, which targeted and marketed financial training as only being needed by a specific socioeconomic group based on their perceived needs of this group. But if employers and conferences are not careful, they run the risk of perpetuating a similar belief and practice.
History
It’s hard to separate historical practices from historical policy initiatives. Particularly when you consider that certain social programs were created and targeted for specific socioeconomic groups. (Think: the non-profit I referenced earlier.)
Media
Some media outlets can sometimes perpetuate stereotypes or reinforce certain narratives, including those related to who has financial knowledge and who has been exposed to financial best-practices, and, thus, is good with money. Therefore, if the media can contribute to the perception that only poor or first-generation people need support with money, then they can also be intentional about telling the counter-narrative story, as well.
More Than Ever
I’m first-generation when it comes to my earnings, but not when it comes to being college-educated. So, my concern about the possibility of employers and conferences potentially being short-sighted and, unwittingly, endorsing or perpetuating stereotypes of who needs guidance and support with money is, in part, personal.
Professionally, my concern stems from what I’ve observed first-hand in my work. It is why I think it is faulty to presume that the variances in financial knowledge, exposure, and expectations only exist across socioeconomic groups. These variances exist within socioeconomic groups, too.
The way I see it, the notion that some people need guidance and support while others don’t skips over the subtleties and nuances of money.
This is why it is so crucial to challenge some assumptions and recognize that financial guidance and support should be based on individual circumstances, needs, and vulnerabilities, rather than broad generalizations about socioeconomic status or background.
And just as the need for financial guidance and support is universal, so, too, are our biases. We all have them; it’s a natural part of being a human. And even though we cannot eliminate them entirely, we can work to increase our self-awareness of how and when our conscious and unconscious biases are showing up and influencing the judgments we make and actions we take.
Hence, my clarion call that we need to challenge the assumptions made of who needs financial guidance and support…and why they may need it.
This is an inclusive approach to financial well-being. This is diversity and inclusion showing up in personal finances.
