Like many personal finance writers, I have no idea what to say about money right now. What advice, information, or tips I could offer that would offset the devastating financial hardships so many of us are facing?
When the bottom drops out of the economy, the usual money strategies and solutions that I might point you to are flung out of reach.
I’m not going to pretend that there is a lot you or I can do to change our situations. I’m not going to act like I can work well without child care, or that my freelance income hasn’t fallen by 80%.
I’m not going to ignore the fact that many people are out of a job and that unemployment benefits are running out this month. I can’t turn my back on the fact that many people are months behind on rent and praying that eviction suspensions hold.
I don’t know what to say because, truthfully, I don’t know that there is much to say right now. And I know that many other personal finance writers are feeling this as well. In fact, I believe more should. Because, despite the difficult situations many Americans face today, there are still daily tweets and blog posts that act like nothing in life has changed.
For example, the “money expert” in my Twitter feed claiming people struggling financially while living in a high-cost city are choosing the difficult situation they’re in. This advice disregards the fact that many people have to live in these cities in order to maintain and grow their careers. Or that they may have lived in this high-cost city all their lives — and moving can be prohibitively expensive and cost them their entire support system.
And how about a tweet pushing people to change their ideas of fun from “low-value” pastimes like watching Netflix and playing video games to investing and building businesses? Do people in our incredibly stressful times not deserve to decompress when they can?
Clearly, I’m feeling salty. Actually, I’m Ticked the H*ck Off™. But my anger toward conventional finance advice is nothing new.
What is new is that the pandemic is making it hard for me to keep quiet about how willfully oblivious these money takes are. The truth is that the most popular financial advice (and the affluent experts writing it) has been out of touch for years.
So, before I continue to write on my blog about the realistic things you can do to reach your financial goals, I need to tackle what’s unequal, toxic, and unjust about the foundation that the personal finance advice world is built on.
Here are the main things wrong with traditional financial advice:
- It’s based in shame and blame.
- It doesn’t address psychological and behavioral elements.
- It’s unhelpful, even openly hostile, to people with few resources or opportunities.
- It doesn’t evolve to keep up with rapid economic changes of the past few decades.
- It prioritizes building net worth above well-being and value of life.
These factors not only make traditional finance ineffective for many, it can cause us to internalize a sense of shame about our financial situations. When money advice shames or blames people (or ignores the massively important psychological aspect of money), some might get the message that they’re bound to always be “bad with money.”
In addition, when money advice ignores the realities of underrepresented minorities or people living on low incomes, it tells us they lack the work ethic or merit to earn more and succeed. Finally, when the advice makes the dollar the all-important measure of success and a good life, it pushes people toward overly-restrictive, unhealthy, and misaligned financial and life choices.
This is the core of what enrages me about traditional financial advice: it actively harms people. There are so many of us who read or hear personal finance advice that leaves us feeling ashamed, worthless, hopeless, and filled with despair. And how can we move forward when the solutions we seek all turn into emotional and mental blocks?
In order to get to the bottom of this, I’m going to write separate posts for each of the above bullet points. We’re going to go deep so you can see the ways some advice might be doing you more harm than good — and then we’ll talk about what you can do about it.
If this sounds interesting to you, bookmark this page. I’ll link each post into its respective bullet point when published.
Lastly, I want to be clear: I am by no means painting the entire personal finance community with this broad brush. While the above describes a certain portion of finance experts, it by no means reflects all of us.
So many personal finance creators are doing their work well — discussing systemic issues and offering grounded money solutions and nuanced financial strategies. For examples, check the (non-comprehensive) list below of money media creators who, imo, are offering thoughtful, balanced money advice. If you have your own favorite finance creators who you feel fit this bill (or you are one yourself!), drop a comment linking to their work.
Recommended resources
- Helaine Olen of The Washington Post has been reporting on financial inequalities and realities in America for years. Her book “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry” is a must-read. Or check out her chilling recent column: “It’s Clearer Than Ever That Covid-19 Will Increase Inequality.”
- Melanie Lockert is breaking down the stigmas around two tough topics at once: money and mental health. She hosts The Mental Health and Wealth show, a podcast with honest conversations about how finances affect our well-being, and vice versa.
- Kristin Wong offers practical money advice that I first found years ago as a reader of Lifehacker’s Twocents blog. She’s since published “Get Money,” a fantastic book for anyone looking to level-up their money game, and is currently web editor of The Financial Diet. Check out these two must-reads: “Does Personal Finance Still Work in Our Changing Economy?” and “We’re All Afraid to Talk About Money. Here’s How to Break the Taboo.”
- Lillian Karabaic has been a lifeline for me in the pandemic, with thoughtful and in-depth money conversations on her podcast Oh My Dollar! Check out the timely episode, “How to Care About Money When Nothing Is Okay,” or tune into her weekly YouTube livestreams where she discusses current financial events.
- Gaby Dunn’s podcast Bad With Money is a can’t-miss, as she and guests dive into the complexity of money topics (I have her book of the same title on my to-read list!). Start with episodes, “How to Live on $2 a Day” and “The Gender Pay Gap (aka Why There Aren’t Any Female Elevator Operators).”
- Kara Perez of Bravely Go often talks about the intersection of money, gender, race, and history. Check out the Bravely Go Instagram account for stories from Kara that explore the history, stats, and context of our financial lives. Also, check out her financial feminist podcast with Tanja, The Fairer Cents.
- Tanja Hester’s writing usually gets me thinking (I’m reading her book “Work Optional” at the moment). Her recent posts are standouts: “How the Personal Finance Sphere Upholds Systemic Racism” and “Retire Early Without Harming Others // A Hard Look at FIRE and Racial Inequality.”
10 Comments
Chris
July 24, 2020 at 12:32 pmI am very surprised you did not mention Michelle Singletary in your list of recommended people to follow. She is a personal finance writer for the Washington Post. Her column is called “Color of Money”. I have been following her for many, many years now. She writes about common sense stuff that most people can relate to, and also gives points of view to issues I hadn’t even considered, given my white, middle class experience. She is the real deal, and I have learned much from her in her columns, weekly chats, and books. Good post today, and I had not read your blog before. I found you through the “Collecting Wisdom” site.
The $76K Project
July 24, 2020 at 4:26 pmThis is a great post!
Just remembering back to less than a year ago when people were making fun of others for having more than a few thousand in savings… “You should invest! Your savings are only depreciating!”
And now all of a sudden it’s like, “Wow, you’re an idiot, you should have saved more! Why don’t you have a year’s worth of expenses socked away?!?”
This pandemic and its effects are totally going to upend the typical financial advice of the last decade or so, but it’s also going to make that advice that much more difficult to follow. People are struggling to buy groceries and pay rent, much less save buckets of money.
Revanche @ A Gai Shan Life
July 24, 2020 at 5:39 pmI am reflecting on how the delivery of that traditional financial advice was so different many years ago – it wasn’t actually imparting of advice. It was literally the mapping of a journey and people implementing the advice in the ways that suited their journeys. Now the sound bites on Twitter, and the near-total pivot to dispensing advice has turned everyone into a mini Dave Ramsay or Suze Orman and frankly, I ignored both of them in my money journey for a good reason.
JTE Elms
July 26, 2020 at 11:34 amGreat post. I look forward to your follow-up articles.
Kevin Payne
July 27, 2020 at 2:23 pmGreat post, Elyssa. I’ve been having an internal battle over what type of financial advice to share on my site. I believe in many standard financial practices with the PF world, like emergency funds and budgets, but there’s a lot of people hurting financially, mentally, emotionally, spiritually, etc.
Most blogging advice says to figure out your avatar and write content for them but it’s hard to ignore the fact that there’s so many people outside of that. No matter what I write, it doesn’t address the needs of a ton of people. Regardless of topic, I try to approach it all with grace.
I appreciate your words and addressing this topic.
Just a little (link) love: Master Splinter bear edition « A Gai Shan Life
July 30, 2020 at 11:00 am[…] Brave Saver: “This is the core of what enrages me about traditional financial advice: it actively harms people. There are so many of us who read or hear personal finance advice that leaves us feeling ashamed, worthless, hopeless, and filled with despair. And how can we move forward when the solutions we seek all turn into emotional and mental blocks?” Note – I didn’t have this problem when I was using blogs as a resource 12-10 years ago but the PF world I delved into and loved was incredibly different then. It was almost all stories about people working through their struggles, it wasn’t all this making money off their platform How To and pushing an agenda. […]
C
July 31, 2020 at 2:43 amthis is a really great post. I am now quite high income by means and medians (not compared to investment bankers though!) and I totally do find good advice for me on, for example, physician finance blogs. But previously I was a poor grad student and spent my teen years definitely lower middle class or even poor moneywise (other advantages meant I wouldn’t say I was low SES though). What I’m able to do and even have mental space to think about has changed DRASTICALLY. Money used to be super stressful… I remember utterly freaking out over a $20 parking ticket. Save for *retirement*? You must be joking! I’ve been fortunate to have frugal tendencies and to have made some good decisions along the way, sometimes quite frankly for all the wrong reasons. I think how much of this was accidental or at least luck… and I can’t understand how people ignore that this country basically has no social safety net…. I haven’t read her book but props to Helaine Olen for calling this stuff out too. Especially now with COVID – it should be so clear that so much of doing well is luck and privilege. It is how our country gets out of doing the hard work on a lot of things: blame the victim. Misogyny, racism, inequality. As the t shirt says, If you’re not angry it’s because you haven’t been paying attention. And it’s the group rage that can motivate social change we need — self blame keeps the status quo entrenched.
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