Dropping the judgmental and prescriptive — shifting to personal goals and small actions
I’ve been in financial services for 20+ years, some in banking but mostly helping folks who are often left out have better access. Some old terms we used were “financial literacy or education.” I’m usually not a semantics person, but these terms rub me wrong for being judgmental and paternalistic.
The poor, the disadvantaged are not any more financially illiterate or uneducated than other Americans.
Much evidence shows that targeted people for these programs are quite savvy at managing money—they just don’t have a lot of income nor cushions to withstand life events like a disability or incarceration.
Why tell someone to save for retirement when they can’t buy enough food?
The evidence has shown we can help each other instead by:
1. NOT wagging fingers but helping each of us set 1-2 self-chosen goals at a time. Preaching on what one should do by overwhelming them with budgeting spreadsheets and financial management apps is NOT the way. We can help each other focus on 1-2 financial goals at a time instead. A client of ours decided to save $500 for a family camping trip and had a wonderful experience. Many experts would say that was frivolous. I say the process helped her do something important to her and regain confidence in taking other financial steps.
2. Creating a “no judgment zone.” We all slip or splurge. I’m not saying go borrow $45,000 for that brand new truck, but also don’t kick yourself for buying a nice gift for your son’s birthday. You’re not a failure if you’ve gotten behind on student loans or medical debt. We are all one car accident away from financial hardship—it can happen to anyone.
3. Making it action oriented. The best way to learn about something new is in the moment of need and take action. So if you want to buy a house this year, take a home-buyer’s class from one of the many providers here in Maine like us. If you want to help your kids learn to save, go to your local bank/credit union and open a savings account with $10-20.
There are organizations like us who can serve as financial coaches.
But like going to the gym with your ‘gym buddy’—maybe find a ‘financial buddy’ and set a few goals with each other. And don’t be too judgy with your buddy if they break down and buy a 101-shot latte at Starbucks (the most expensive Starbucks drink at $83.75).