Building a financial community of people around you that you feel comfortable discussing money with is essential to creating wealth, but also to creating equality. Here’s how to build a financial community.
Most People Don’t Have a Financial Community
Most people don’t have any financial friends. I’m not saying most people don’t have friends. I’m saying most people don’t have financial friends, AKA a group of people that they can talk about money with. So a lot of us are afraid to build this type of community. Many of us still think of talking as money as really taboo.
We’re taught to never talk about money
I’ve contemplated addressing the question, but I always resort back to the fact that discussing salary is quite distasteful. It’s not that we’re just taught not to talk about money, but we are also taught not to lend people money. We are taught not to go into business with friends or family because money will drive those relationships apart. But honestly, this doesn’t make any sense to me.
We as humans are social creatures. We need each other in every other part of our lives. So why wouldn’t we need each other when it comes to money? We need friends, family, co-workers. We need people to watch our kids while we run out to the grocery store. And we need people who can carpool to work with us. So it follows that we need people that we can discuss money with, that we can lend money to or that we can ask for money from. So we need financial community.
As Americans, we’re allowed to only talk about money in certain ways
Now you often hear the phrase “Americans don’t talk about money.” But that’s only partially true. It’s actually very culturally normal in the United States to talk about money in certain ways. For example, it’s very normal, especially in recent years, to talk about how expensive everything is. It’s very common to talk about your big expenses like child care. You may hear things like, “Oh my gosh, I pay almost as much in child care as I do for my mortgage.” What’s less common is sharing financial specifics. I.E. how much debt people are in or how much someone earns, what their salary is, or exactly how much their mortgage costs.
Why We Don’t Talk About Money
This kind of financial withholding is a hangover from our British colonizers. British society is very strange about money. We also have an uncomfortable level of historical awareness of how unequal money has been, and still currently is in the United States.
In England, there is a very distinct class system. They literally have a monarchy. They also have things like dukes and duchesses and this class distinction benefits those who already have money. Not only do they have the title and the lands, but they have the money to back these things up.
Not talking about money benefits these people. Because if the duke says, “Oh, yeah, it’s totally acceptable to ask me how much money I have”. And then you ask the duke how much money he has, and he says “$20 million,” while you’ve got barely 20 pounds to your name, all of a sudden, the old engine starts clicking away in your brain. You may think, why does this person have so much while I have so little? The same is true here in the United States. The United States has never been a financially equal society.
Talking about the history of our country is “not polite”
In the beginning of our nation, we enslaved Africans and Black Americans, so that white Americans could profit off of Black labor. At the same time, we kicked Indigenous people off of their lands so that again, white people could profit off of owning that land. Talking about this history or talking about how people accumulated wealth is not polite in the United States society.
This kind of conversational limitation has trickled into other classes too. Middle class and working class people also may think it’s rude for you to ask how much money do you make. People are generally not comfortable openly discussing how much money they earn. They’re also not comfortable disclosing how much they pay in rent, their mortgage, or what interest rate they’ve got on their car loan.
We Look at Possessions To Signify Wealth
Thus, we live in a world that uses possessions to signify value. If someone has or is perceived to have a lot of wealth, we automatically think of that person as more valuable to society. This kind of thinking perpetuates unhealthy class dynamics and can also impact our self esteem. If we don’t have something, like a Lamborghini or a Birkin bag, we may think of ourselves in a negative light.
It can also impact things like our empathy and compassion. When we live in a world that says people with money are better, we tend to have less empathy. We also have less compassion and less understanding for people without money. As individuals, we don’t want to be seen with lower class people. We want to associate ourselves with the higher class.
Wealth and Social Hierarchy
This kind of social hierarchy perpetuates problems around class division around homelessness and around wealth in general. We live in an age where everything is getting more expensive, including necessities like housing and food. As a result, we’re seeing more people become homeless. But we’re not changing the way we talk about homelessness. No one is saying, “Why don’t we fund more social programs to house these people?” We are instead blaming these people.
A 2018 study from England entitled, “The Psychology of Social class: How socio-economic status impacts thought feelings and behavior” finds this to be true. The widely held view that working class individuals are more prejudiced towards immigrants and ethnic minorities is shown to be a function of economic threat. Highly educated people also express prejudice towards these groups when the latter are described as highly educated and therefore pose an economic threat.
The fact that middle class norms of independence prevail in universities and prestigious workplaces make working class people less likely to apply for positions in such institutions. It also makes them less likely to be selected and less likely to stay if selected. In other words, social class differences in identity, cognition, feelings, and behavior make it less likely that working class individuals can benefit from educational and occupational opportunities to improve their material circumstances. This means that redistributive policies are needed to break the cycle of deprivation that limits opportunities and threatens social cohesion.
Not Talking About Money Benefits Those in Power
Not talking about money only benefits those who have money and does absolutely nothing to help the rest of us. In specific situations like wage transparency in the workplace, financial transparency can lead to more trust in the company. It can lead to retaining employees for longer and it can lead to overall greater workplace satisfaction. Lack of workplace pay transparency is one of the main reasons that the gender and racial wealth gap and pay gap has perpetuated for so long.
If you’re a Latina, working in HR, and you’re making 50 grand a year, you may not know that the white woman who has the same role as you is making $70,000 a year. You don’t know that you should ask for more money or that you should fight for change. Once you do know, you can create change in the workplace or leave that job.
Outside of the workplace, talking about money is helpful because it can deepen relationships. This may be a family relationship, a friendship or more of an acquaintance. Having the ability to talk about money can deepen the relationship and lead you into new friendship territory.
Friends & Financial Resentment
A common problem among friends is financial resentment, whether or not it’s directly addressed. For example, you might have a friend who has $60,000 in debt, and a friend who has no debt. The friend without any debt may suggest more expensive things– going to an expensive happy hour or going on a luxury vacation. The friend with debt to pay off may build up resentment because affording these more expensive things is harder for them.
Instead of allowing that resentment to build up or allowing this financial difference to divide the friendship, having a simple conversation about money can solve this issue. The friend who’s working on paying off debt can say something along the lines of: “I would prefer to do X as opposed to Y.” And the person who doesn’t have debt can be more aware of the financial differences between them. Then, adjust plans accordingly.
How to Build Financial Community
Step 1: Casually talk about money with your friends
The first thing is to share first, if you want financial community. The easiest way is to be the one who starts building financial community. Be polite and start small, but start bringing up financial conversations with your friends. You shouldn’t be asking something like “Hey, can I see your paycheck?” the first time you meet somebody. But with people that you already have a relationship with, you can start asking financial questions or bringing up financial topics and seeing how the conversation goes.
For example, you can say to your friend who just bought a house, “Oh, I’m thinking of buying a house. Can you tell me what your interest rate is on your mortgage?” This is a broad conversation. You’re not asking to see the inside of their bank account. The interest rate is not set on their finances. It’s set on federal interest rates. So it’s a topic of conversation that people will probably feel comfortable sharing. Or you could say something like: “Oh, I’m working on paying off some credit card debt. Have you ever paid off any debt? Do you have any tips for me?” This invites them into the conversation, but also allows them to set boundaries themselves.
They may be looking for financial community too
So if they’re also looking for financial community, they may respond with “Oh my god, yes, I paid off 20 grand of credit card debt. It was so hard. Here’s what I did.” Or they might say something like, “Oh yeah, I’ve got some debt I’m working on. I’m just trying to make an extra payment every month.” Either way you’ve broached the topic. You’ve opened the door and you’ve established yourself as somebody in their life that wants to talk about money. So the next time they may bring it up with you. Or, you can continue to bring it up in the same way that you had success.
Step 2: Host events around money
Next, you can host events around money. I’m not talking about needing to rent out a space and get really hyper-organized or really intense around this. I’m talking about being very casual. Something that I always thought would be fun to do is host budgets and brunch. You have people over for brunch, bust out the eggs, bust out the toast and in the invite tell people this is a time to work on their individual budgets. You can open this up so that people can share their budgets, ask questions, or you can keep it kind of private. All of you could be in the same room together, but people are working on their budgets individually and not sharing numbers.
This kind of event that is casual and fun, but it also has a financial component. It establishes you as the money friend, and lets people know that this is an activity. There’s going to be structure around this. Similarly, you can attend financial gatherings other people are hosting.
So instead of you having to be the one to constantly put together budgets and brunch, you can go to financial events that other people are hosting. There are a lot out there. There are mastermind groups, groups online and there are groups in-person. I personally like to find events on Eventbrite and Facebook. If you type in, wealth event, money event, something along those lines, something will pop up either in your city or in your general area. And you can go and meet new people who are interested in money.
Step 3: Be direct
Finally, you can be direct. If this is somebody that you’ve known for a long time, or somebody that does well with directions, you can just say flat out: “Look, I’m trying to change my financial life. I’m trying to build financial community. Is that something you’re interested in?” Or “Hey, I want to learn more about investing and I don’t really want to do it alone. Do you want to be my investing buddy?” Something along those lines. That’s straight to the point. I know that I personally, love direct conversation. I would be thrilled if somebody asked me to be their investing, buddy. Can you actually believe no one’s ever asked me to be their investing buddy? For someone who spends her entire life talking about money. No one’s actually asked me that.
If you want to be my investing buddy, let me know in the comments! And if you’re more of a visual or auditory learner, we’ve got all this info in the Youtube video below: