Home Financial responsibility Opinion: Investing in diversity – for Black History Month and beyond

Opinion: Investing in diversity – for Black History Month and beyond

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As we recognize Black History Month, it’s a good time to pause and reflect on the financial gaps that put many Americans at a financial disadvantage. While the work that needs to be done will be nothing less than tectonic to truly resolve these challenges, there are actions we can take within our own individual finances to help us achieve our personal goals while supporting the values ​​around the diversity.

If you’re not sure where to start, here are some simple steps to help you align your financial choices with your values, whether it’s focusing on your education, that of your family, or the community at large.

  1. Start simple: set concrete goals.

Having clear and specific financial goals is important for anyone making a solid financial plan, but even more so for Black households considering that many are already starting behind: the median wealth gap of Black families holding 12 cents to $1 of white wealth is largely unchanged. over the past 30 years. On average, black households earn 61 cents for every dollar of income earned by white households. Black college graduates hold an average of $23,400 in debt, compared to $16,000 for their white peers. And financially, this inequality can worsen over time, with white Americans holding an average of seven times more retirement savings than black Americans.

Making progress in your personal finances can seem like an uphill battle, but it’s possible to pursue your personal aspirations while balancing your support for the people and causes you care about. Start by asking your employer about any financial planning or coaching tools that might be available at work. Taking advantage of workplace benefits can help you meet your immediate needs and help free up extra funds to set aside for other larger goals like education, charitable giving, or retirement.

  • Take stock of the resources around you.

Given the unique challenges facing the Black community today, access to financial education has never been more important. And “first-generation” professionals in many fields may not have learned from family and friends how to manage wealth-creating resources like equity compensation or investing.

Demystifying financial empowerment – ​​and providing opportunities for wealth creation – in diverse communities can help spark change individually. Start small: Many workplace financial education modules and sessions aim to help you learn the ropes of basic financial planning, investing, and making the most of all the equity-related benefits you get. Take advantage of these benefits to better understand your own finances, as well as how you can align your money with your values. Also connect with employee resource groups to learn more, share more, and understand how some of these issues play into broader social issues.

Participating and educating yourself is the first step: putting it into practice is the next. Bring what you learn back into your community, whether through volunteering, mentoring, or recruiting efforts for your business.

  • Make investment a top priority.

Investing can help protect your future, which puts you in a stronger position to help the people and causes you care about. In a 2020 survey, just 36% of black Americans said they had money in the stock market — including in a 401(k) or other retirement account — compared to 60% of white Americans.

Explore the retirement plan options available to you at work and take advantage of any employer matches. Also consider other investment options that can help you build wealth over time. For example, you can work with a financial advisor to build a portfolio of investments that focuses on companies that promote workplace equality, access to capital, and products and services that benefit diverse communities, while avoiding exposure to companies with a poor diversity track record. Your benefits can help you access financial coaching or advice to help you get started.

Make your personal financial stability a priority

Individual financial choices can help make the difference. Putting yourself in a stronger position gives you more room to help lift diverse families and communities. Prioritize your personal financial stability and plan first, and don’t hesitate to plug into support through your workplace benefits when looking for ways to turn your values ​​into action.

Rodney Bolden is Vice President, Financial Wellness at Morgan Stanley at Work.

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