A Reflection on Personal Finance
By Eva Tirion
In light of international protests, calls for police reform, and social justice movements both on and off social media following the murders of George Floyd, Breonna Taylor, and Ahmaud Arbery, the team at Money Muse stepped back for a moment to reflect. As a company with white leadership, we are exploring ways to use this platform productively without generating “white noise” and taking away from black leadership and voices.
In order for Money Muse - a company whose services are most accessible for affluent womxn - to act as an ally and serve a larger demographic of womxn, we must first address how personal finance is a privilege.
Personal finance is the practice of managing financial budgets, investments, and retirement planning for yourself and/or family. Due to a combination of factors that contribute to America’s wealth gap, the demographic of people most likely to have flexibility in personal finance decisions are white. This shouldn’t come as a surprise. As shown in the graph below, one of the most straightforward contributions to the wealth gap is the widespread income inequality in the US.
Data from the US Bureau of Labor Statistics.
But other factors play into the ever-widening wealth gap too. Since white Americans are often able to accumulate and pass down wealth and assets, they have greater access to education and more upward mobility in their careers than black Americans who do not benefit from generational wealth. To put this into a monetary perspective, a survey conducted by the Federal Reserve of Consumer Finances discovered that the median net worth of white households ($171,000) is about 10x greater than the median net worth of black households ($17,600). This discrepancy, as with nearly every aspect of systemic racism, began with America’s early social and political infrastructure.
The power of generational wealth can be traced back to the abolition of legal slavery in 1865. “40 acres and a mule” was an order enacted by Gen. William Sherman (although interestingly, the idea was created by twenty black ministers) to reallocate plots of formerly white-owned land to recently freedmen. However, this was a fleeting moment of hope as most of the 400,000 available acres were never given to the deserving black families or “returned” to the original Confederate owners. “40 acres and a mule” was yet again another systematic set-back for black communities hoping to finally own and govern land in a post-abolition society. As reconstruction began, the Jim Crow era - a collection of laws upheld until 1964 that permitted large-scale racial segregation - disenfranchised black communities, denied them access to education, and catalyzed the disproportionally higher incarceration rates that still stifle black communities today. Gone was the possibility for many newly freed black families to create economic stability and own land to be passed down to their children. Wealth was taken from these families before it even had the opportunity to grow.
Fast forward to 2020. America is still underserving these communities, and the past week has only thrown this reality into greater light. According to the New York Times, “today’s racial wealth gap is perhaps the most glaring legacy of American slavery and the violent economic dispossession that followed.” Access to education, a stable income, and the possibility for upward mobility in their careers are critical factors for black individuals to transcend their circles of poverty, but this proves difficult without any wealth inheritance as a launchpad. Forbes describes this inequality in one disturbingly perfect, all-encompassing metaphor: “it’s [like putting] someone on the putative starting line and another on the 90 meter mark in a 100-meter dash.”
How does this relate to Money Muse? As I mentioned before, our team is reflecting on how we can better serve and include BIPOC (Black, Indigenous, and People of Color) womxn. We understand that money means choice, and choice means power. The goal has always been to vivify this power in womxn across the country, and now more than ever, our team is consciously examining the systemic barriers for BIPOC womxn to take ownership of that power.
As a college student myself, I have seen a tremendous upswing in support and involvement in the BLM movement from my generation. I am far from perfect and am still learning how to use my white privilege to work towards the goal of a reformed American society. This past week I have spent time diversifying my social media feed to represent more black artists, media personalities, and political activists. I am engaging in candid conversations with my family about our unconscious biases and how we can better educate ourselves. I attended a Zoom call led by white educators and political activists to address how white guilt and shame can inhibit our ability to enact change. I made BLM signs for our windows and used the power of my voice at protests in San Francisco. These steps should never and will never make me feel comfortable that “I have done enough,” but I believe they are helping me become more comfortable with confronting my privilege and exploring ways to be an ally. I understand our collective responsibility to enact change now to promote financial wellbeing for black Americans in the future; according to a 2017 study done by the non-profit Prosperity Now and the Institute for Policy Studies, the median wealth of black Americans is expected to be zero by the year 2053. Let that sink in.
It is with an empathetic heart that I wrap up this post. I recognize the importance of my generation’s advocacy and allyship during this time, and I enter my young adult financial sphere with greater awareness. As always, if you have thoughts on how Money Muse could be a better ally, please don’t hesitate to reach out.
Organizations to support:
Black womxn in finance to support: