Note: I am not a registered investment, financial, or tax advisor, or a broker-dealer. All financial opinions expressed in this article are intended as educational and reflect the personal research and experiences of the team. Feminist Book Club holds no responsibility or liability for any errors, losses or damages incurred as a result of any individual actions based on the provided information on any of our communication platforms or events.
Do you know why we need financial literacy in this country? Good old-fashioned capitalism. We live in a society that rewards the rich for, well, already being rich. Financial literacy is a frustrating and difficult part of our daily lives that can make or break a family. Whether it’s not having enough cash to pay rent or getting denied a crucial loan because of your low credit score, financial literacy is a concept that every single person living in the United States could benefit from.
At my previous job, I used to run a nonprofit that teaches personal finance. It’s called the 5 Buckets Foundation and currently offers 90-minute modules that introduce folks of all backgrounds to financial literacy (I even talked about it with Natalia on the podcast here). What does “all backgrounds” really mean? Is it possible to have intersectional personal finance? I’m a Certified Educator in Personal Finance (CEPF) and can say with full confidence that financial literacy education has very much been geared toward ~certain~ privileged demographics.
So what can YOU do today to help your financial situation? It all starts with a budget. First, I’ll review a helpful budgeting strategy to get you started which, full disclaimer, was created to enforce a capitalistic society but I will tweak it. Then, I’ll share specific resources that could help implement intersectionality into your personal finance journey.
The 50-30-20 Rule
It can be difficult to boil down budgeting into one strategy. Should I use an app? How do I track my expenses? Why do I keep going over budget?
One rule of thumb that I’ve learned while teaching personal finance is the 50-30-20 rule. You spend 50% of your budget on your needs, 30% on your wants, and 20% for savings.
Let’s break it down.
- First, calculate your monthly income. Gather the exact amount of money you make, post-tax, and use that to create your budget.
- Next, calculate 50% of your income and allocate it to your needs. Whatever your monthly income turns out to be, make sure that 50% of it is set aside for what you need to pay every month. This includes rent, utility bills, car payments, gas, food, etc. This is the money that you need for the basics – half your budget goes to that.
- Then, set aside 30% of your monthly income to your wants. This is where your personal spending comes in! Less than a third of your budget is for shopping, eating out, going to the movies, and recreational spending that makes you happy.
- For your last 20%, use this for savings. Savings come in a variety of forms – you can set aside 20% for your savings account, retirement funds, saving up for a large purchase or investment, or anything that has to do with long-term savings.
Once you allocate out the amounts for each category, you can break it down even further and itemize how much each payment amount should be (i.e. your “needs” section might be $750 for rent, $300 for student loans, $200 for groceries, and $100 for gas money).
This is where it’s up to you how you can adjust your budget. The 50-30-20 rule is meant to be a “general guideline to help get you thinking about how to allocate those paychecks.” This rule is not the end-all-be-all of budgeting strategies. If you need cash now, then you may forgo the “saving” category. If you live in a high-cost area, your “needs” category may be larger than 50%. The 50-30-20 rule is meant to get you started – and you adjust as needed.
“One size fits all” doesn’t apply in personal finance, especially in the inequitable society we live in. There are still rampant wage gaps, especially for women of color, discriminatory financial institutions, and greater financial barriers for people of color. What you can do is start with a simple budget, find what works for you, and utilize intersectional financial institutions to achieve your goals.
Below is a list of intersectional financial resources and organizations:
- 5 Buckets Foundation offers free 90-minute introductory financial literacy workshops through an intersectional module.
- Citizens Bank has a 50-30-20 budget calculator tool at the bottom of this page.
- Here is a list of 5 Black-Owned Financial Literacy Apps that can help you get your finances in order.
- If you want to work with a professional, here are Pro Bono Financial Advisors for BIPOC.
- Daylight Bank is a financial institution/bank that is tailored towards helping queer folks finance their family planning journey.
- Here are 27 banks and credit unions that make it easy for immigrants and non-US citizens to open accounts.
- Here is a story of how a woman got a bank account while experiencing homelessness and her tips to attain an account without a permanent address.
- Veterans can learn more about the Veterans Benefits Banking Program (VBBP) here.
This is not by any means an extensive list of the financial resources that can support intersectional personal finance. The 50-30-20 rule (adjusted as needed) and this list of resources can be a launching point for your journey. I also do not have all of the resources and credentials needed to support a true intersectional personal finance journey. It’s important to discuss financial decisions with a professional.
Intersectional personal finance is an oxymoron. Capitalism is not intersectional. But, there are organizations out there that are helping bridge the gap to increase intersectionality within personal finance practices. Is it perfect? Absolutely not. Is it impossible? Also – absolutely not. All it takes is taking one small step forward (like…creating a budget that works for YOU) and seeing the impact it has in your life. Comment your personal finance strategies below and if you used any of the resources listed here today – I’d love to hear from you!