Addressing privilege in personal finances

Time to invest in the U.S. dollar? | Morningstar

I have previously written about the element of privilege when it comes to FIRE, i.e. Financial Independence Retire Early.

Today, I want to talk about privilege beyond the FIRE movement. The common stance on this matter is to be entirely dismissive of the notion of “privilege” when it comes to managing money. As if being “good” with money was only a question of “making the right moves and choices”.

It’s mostly true that if you make the right choices for your personal financial situation, you will come ahead.

But that’s just not it either

You see, I believe the country you are born in and your upbringing will also largely determine your “financial picture”. I’ll use my own background to illustrate my point.

I am a Caucasian, heterosexual woman. I was born and raised in France, then emigrated to Canada where I’ve been living for the last 14 years. Growing-up in France, I had free – or very low cost -access to quality healthcare and education. I attended and graduated from university debt-free.

My parents were not wealthy -actually money was tight more often than not- but we always lived in nice neighborhoods, had nutritious food on the table and clean clothes on our backs. We also had utilities, cable TV and, at some point, Internet.

Because of my profile, I qualified for an immigration visa to Canada. Because I am healthy, I have the time and energy to pursue and advance both my career and education. In turns, it gave me more financial resources to save and invest money, buy a home and travel the world.

I could go on and on.

I am a textbook example of privilege….you probably are too

Particularly if you were born in a Western country, as it puts you ahead of 50% of the planet. However, I am not saying there is no poverty in the Western world.

In fact, there is another set of criteria that will also determine your “financial picture” and drastically expand or contract your privilege.

These criteria are pretty much all the personal finance advice out there:

  • Save X% of your income
  • Pay-off your debt
  • Don’t incur debt
  • Remain debt-free
  • Have an emergency fund
  • Save for retirement
  • Save for your kids’education
  • Invest your savings
  • Build your credit history, i.e. have access to credit
  • Have a side hustle
  • Live below your means
  • Increase your income
  • Have adequate insurance
  • Further your education or get one
  • Pursue FIRE
  • The list is endless; feel free to add to it!

Now, tick all that applies to you, based on your situation. The more you tick, the more privileged you are. And that’s only a rickety list!

Not everyone has access to the same financial choices

That’s where the problem lies.

If you’re living paycheck to paycheck, chances are you’re not saving any money. If you’re unbanked, you probably don’t have access to credit and can’t invest your money.

But also, if you’re not Caucasian, you’re most likely to have more difficulties with the above list. I don’t want to generalize, however Afro-Americans, Latinos, Asians and First Nations tend to face more financial and economic discrimination than Caucasians.

We have entire systems that unfairly and systematically discriminate people, based on circumstances that are not pretty much not in their control.

Privilege is real

Don’t get me wrong. I am not saying it’s impossible to have more financial choices or to get out of poverty.

What I am saying is that we have to stop believing that being “good” or “bad” with money is only a matter of “personal choices and decisions”. Because it isn’t.

Clinging to that belief is damaging for everyone and keeps everyone stuck.


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