Dear Kiki, I am a daughter of Asian immigrant parents who are extremely frugal and risk-averse when it comes to money. As a result, I grew up not knowing much about budgeting or investing. In the current economic climate, I feel like I’m far behind my peers who have portfolios or own several assets. How can I improve my financial literacy and afford a place? – Ready to Up My Financial Game
Whether we are grabbing our morning coffee, buying groceries, or deciding on a clothing purchase, dealing with money is an integral part of our daily routine. These financial decisions may seem minor, but they can have long term impacts on our experiences and wellbeing.
However, access to financial literacy is a wide-spread issue. According to a 2020 study, only 20 percent of adults in the US demonstrated a high level of financial literacy.
You are certainly not alone in feeling like you need a crash course on how to manage your finances better, like saving, budgeting, and managing debt. Even though some high schools are starting to roll out financial courses, they’re not a requirement in all of school curriculums. As a result, most of our knowledge comes from our family and social networks, media, and other available resources.
Your parents’ attitudes about money and the culture you grew up in shape your money script. These are subconscious beliefs developed since childhood, such as being cautious about finances, and can continue to influence your decisions as an adult. By identifying what is or is no longer serving you can help you develop a healthier relationship with money that also aligns with your goals.
It’s never late to educate yourself and improve your financial wellness. Like other aspects of your wellbeing, it is an ongoing journey of learning and adjusting.
Rewriting your money script
Our perception of financial health may vary, especially based on what was modeled to us when we were kids. Understanding the circumstances your parents dealt with can help alleviate some of the resentment you might feel about not being where you want to be.
Many immigrants experience financial hardships either prior to moving to a new country, or when they arrive. There are also many barriers that stand in the way, including language and not knowing the laws and regulations in a new country. Some may have challenges looking for a job or securing a loan to start a business. Many live in survival mode, where getting by was the main goal. Understandably, they are less comfortable with risks or are more vigilant about their money and do not have room to make what they might perceive as “risky” investments.
On an episode of So Money with Farnoosh Torabi, guest Giovanna “Gigi” Gonzalez, a first-generation Mexican American finance educator and author, talks about how growing up, she thought being financially responsible was to invest in paying off debt and achieving stability.
However, there are other important aspects that are important to our financial wellness, such as building your net worth, paying off debt and investing. Immigrant parents don’t teach their kids about these concepts or know much about them because they are focused on surviving.
Breaking out of this cycle requires us to acknowledge the origins of these patterns and to rewire our habits so we can make financial decisions that align with our personal values and goals.
See also: Paths to Prosperity: How young Asian Americans are redefining wealth – Cold Tea Collective
Starting slow
There is a treasure trove of information out there on multiple platforms, but the challenge is always to discern between good advice and a sales pitch. So, start small and slowly build your knowledge base.
A helpful approach is to become more well-rounded in terms of different topics. Beyond saving and budgeting, think about debt management, long term investments, retirement planning and contingency funds. Taxes and regulations are ever evolving so it is important to stay up to date if possible.
Draw on your friends and networks but take everything with a grain of salt. Know your values and priorities and figure out your comfort zone so you can make decisions that match your goals and circumstances. There is no magical solution, but there will be an approach that works best for you and your life. For example, if investment is not feasible, then look for something that is low-risk and diversify.
Don’t get me wrong, I am no financial expert. I’m also just embarking on my own journey. I have always stuck to saving money and cutting small things from my budget, which were handy habits passed down by my mom.
However, I’m in a different stage of my life now. I have a mortgage, two young kids and as an only child, I’m also looking out for my ageing parents. It can feel overwhelming at times, but having a financial plan – even if it’s not super detailed – quells my anxiety and empowers me to make more informed decisions in my personal and professional life.
Based on my experience, I have found it useful to read about and hear from a range of perspectives, from professionals to self-taught experts and entrepreneurs.
Evaluating your values and needs
Even though there are many books and experts that will provide nothing short of valuable advice, take only what resonates with you. The financial industry historically has been white, and male dominated. According to the CFP board, males make up 76.2% of all certified financial planners, while 82.2% are white.
You might come across a piece of advice from the individualistic North American lens which clashes with the collectivist Asian values that you were brought up with. You may need to consider other obligations you have to your parents or cultural community, such as taking care of your parents or helping out relatives.
Knowing financial literacy on a variety of topics and committing to life-long learning, you can bridge the gaps and develop a healthier relationship with money – and hopefully for the next generation and others in your community.
See also: Dear Kiki: I resent my parents’ expectations over my career. What do I do?
Reclaiming your financial health
Our financial wellness and me inextricably linked to our mental wellbeing.
As Gonzalez mentioned in So Money episode 1639, many Latinas can’t afford not to invest, due to long life expectancies and prevalent culture of Marianismo— characterized by the expectation of women to demonstrate selflessness and devotion to family. Similarly, Asian women have long life expectancies, and they may need to navigate cultural expectations of taking care of their parents and multigenerational households. Therefore, we need to start thinking about how we can take care of ourselves so we can take care of others down the road.
Taking care of your finances is investing into your wellness. There will for sure be highs and lows, as well as gains and losses. By kickstarting your financial literacy journey and becoming more money-savvy, you can work towards a happier, healthier life now and in the future. It’s never too late.
Dear Kiki is Cold Tea Collective’s advice column and it is published in the last week of every month. To get advice from Kiki, submit your questions and comments here. Or, subscribe to our newsletter to get Kiki’s advice straight to your inbox on the last Sunday of every month.
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