When well-known personal finance author and personality Dave Ramsey said in an interview on Fox News that he didn’t believe in stimulus checks, because “if $600 or $1,400 changes your life, you were pretty much screwed already,” social media erupted with responses of rage.
His statement felt like a summation of the traditional, often shame-based approach to personal finance. It highlighted how much the industry upholds the bootstrap narrative — that anyone can live well if only they try hard enough. There’s little recognition of the roles that luck and privilege play when it comes to financial security and well-being.
This doesn’t sit right at a time when the pandemic has left nearly 81 million American adults reporting it’s very difficult for their household to cover usual expenses and millions behind on housing payments or still unemployed. If the personal finance industry truly wants to make a difference in people’s lives, it needs to reckon with the deep-seated issues that allow some people to build wealth while making it harder for others to do so.
Those of us bestowing personal finance advice can start by honestly reflecting on our own financial journeys. This means focusing on the advantages we’ve had along with the obstacles we’ve had to overcome.
“For white folks like myself, it can often be challenging to consider that part of the reason you're successful — in addition to hard work — is privilege,” says Tori Dunlap, a millennial money coach and founder of Her First $100K. “I may have worked hard and made good choices, but I also had good choices to make. We must acknowledge both privilege and hard work in our community.”
Having a loan from one’s parents, getting college paid for (getting to go in the first place), landing a well-paying job, and having a partner who can cover or split the bills are all significant helping hands that allow some people to take risks — for example, by investing in Bitcoin or starting a business — without compromising their financial security. Yet these advantages tend to be downplayed or left out of popular “blueprints to success” that are meant to be easily replicable.
“People may believe that if they were to acknowledge the privileges they've had along their journey, that it will somehow discredit their accomplishments,” says Cindy Zuniga-Sanchez, founder of Zero-Based Budget Coaching LLC. “I don't think anyone asks that experts, bloggers, influencers acknowledge systemic oppression so that they can dismiss (accomplishments). People just want a level of candor, awareness, and the opportunity to be ‘seen’ when it comes to content related to money.”
Understand systemic inequality
Another critical step is for us to understand existing financial inequalities in the U.S. — many of which have been exacerbated by the pandemic — and consider how they should modify the advice we give. This means acknowledging not everyone begins at the same starting line and that life can be more expensive for those who have been discriminated against.