year out of the workforce due to the loss in future income and raises.27
Women who have paid leave are more likely to stay in the workforce the year following birth and are 54% more likely to report wage increases.28 Paid leave for fathers also plays an important role. For every month a father takes paternity leave, his partner's income increases by 6.7%.29,30
Build a System of Universal, Affordable, High-Quality Childcare
Linda argues that building a childcare system would actually be the most important and impactful intervention worldwide. She says it should be treated as “economic infrastructure” (meaning it's available to everyone) and because “it's the biggest barrier to women participating in the economy it would easily pay for itself.” She adds that “there's really no excuse for not doing it except for the stupid old fashioned idea that in some moral world women should be at home. And I try to make it clear in the book that that idea comes from a history of keeping women captive.” Burning rage!
Reform Our Healthcare System
Medical expenses are the number-one cause of personal bankruptcy in the United States and debt rates are much higher for those who are uninsured or underinsured, which are disproportionately people of color. As you can imagine, high medical expenses and resulting medical debt impact a family's ability to plan, save, and build wealth.
Build a Bigger Coalition
Linda says “we've allowed feminism to be cast as a left-wing issue. The left wing claims it and the right wing disdains it, but among the American public, treating women and men equally is just what decent people do. It's a core centrist value and we should start treating it that way.” She argues that “these issues, issues around capital and the economy, are things that in my experience, speak very strongly to republican, financially conservative women.” She believes we can build a bigger coalition from all political parties.
Equality versus Equity
The distinction between equality and equity is extremely important in personal finance. Dasha describes equality as giving everyone the exact same personal finance resources and saying “I provided you with tools, now it's up to you to use them,” whereas equity is giving people the resources that apply specifically to their experiences and needs, especially those in communities that are impacted by systemic gaps and discrimination.
Dasha explained:
Black women live at the intersection of race and gender so we're always fighting two battles. 81% of Black mothers are the primary breadwinners of their homes.31 That means four out of five Black families depend on the paycheck of a Black woman to survive. The conversation around personal finance will be different for us.
When I first started as a financial educator, I'd hear other educators swear off credit and say “Credit is bad. If you can't afford it now, don't get it.” But this is a very privileged and judgmental perspective. For Black women, and Black people as a whole, credit can be a saving grace because it fills the gap when we're not paid fairly and our families haven't had the opportunity to build wealth. Instead of swearing it off, equity is teaching people how to understand it and leverage it if it's needed.
Because personal finance systems look different for each of us depending on our privilege, race, gender, and sexuality, we need more nuance and perspective in financial education.
Your Education Matters
In talking to so many people, especially women, about their financial lives, I've found a common thread in many of our stories. So many of our financial successes come from someone who gave us a nudge. This might be a colleague who urged us to set up our 401(k), a friend who sat down with us to show us how she budgets, or the colleague who bravely shared what she's getting paid so we could compare.
When we get educated around our money, not only do we lift ourselves and our families up, we can be an example of what's possible and we can give others the nudge they need. We bring others up with us and that has a tremendous impact.
Your Financial Adulting Action Items
Understand that politics and money are inseparable.
Understand the racial and gender wealth gaps – where they come from, how they are perpetuated, and how they currently affect your own personal finances.
Help close the gap. In addition to the resources here, you can learn more in the Financial Adulting toolkit. Build your knowledge, use your voice, and vote for leaders who believe in the changes you do.
Support financial educators (and businesses) who share your values and are women and BIPOC-owned.
Become a financial adult. As you learn and achieve more, you'll bring yourself and others up with you.
As you go through each of the following chapters covering different financial topics, you'll see that equity, privilege, and policy are integral parts of the big picture – no more financial advice in a silo. That's the first step to being a financial adult. First up, your money goals!
Notes
1 1. “CPI Inflation Calculator,” U.S. Bureau of Labor Statistics (July 2009–August 2021), https://www.bls.gov/data/inflation_calculator.htm.
2 2. “Disparities in Wealth by Race and Ethnicity in the 2019 Survey of Consumer Finances,” The Federal Reserve (September 28, 2020), https://www.federalreserve.gov/econres/notes/feds-notes/disparities-in-wealth-by-race-and-ethnicity-in-the-2019-survey-of-consumer-finances-accessible-20200928.htm#fig1.
3 3. Heather McCulloch, “Closing the Women's Wealth Gap” (January 2017), https://womenswealthgap.org/wp-content/uploads/2017/06/Closing-the-Womens-Wealth-Gap-Report-Jan2017.pdf (chart, p. 4). Original source: https://assetfunders.org/wp-content/uploads/Women_Wealth_-Insights_Grantmakers_brief_15.pdf.
4 4. “Moms Equal Pay Day 2021,” Equal Pay Today, http://www.equalpaytoday.org/moms-equal-pay-day-2021.
