How Collectives Empower People to Understand the Financial Side of Life

From Observatory

Observatory » Area » Local Peace Economy
Source: Local Peace Economy Project

Removing the taboo around talking about money, two collectives are helping people work toward securing their financial well-being.

Money-2180330 1920.jpg
Aric Sleeper is an independent journalist whose work covers topics including labor, housing, food, and more.
This article was produced by Local Peace Economy.

Financial health is the elephant in the room that we avoid talking about in social situations, at work and even with our loved ones, despite the fact that financial well-being has a profound effect on how we think and feel. A review of 32 studies conducted on the dynamics of financial well-being and mental health between 2001 and 2019 found that a person’s financial situation has a “significant impact” on their mental health, with financial hardship being frequently associated with increased stress, anxiety and depression. Yet, financial well-being remains a taboo subject.

Another study from 2018 shows that among the millennials, Gen Xers and baby boomers surveyed, talking about money was considered a more illicit subject than discussing marital problems, drug addiction, sex, and even politics.

The overall physical health of a person can also be profoundly affected by financial well-being, as it can impede health care access, for example.

“There was a story several years ago about a woman in Boston who got her leg stuck in a subway train. When faced with [the possibility of] losing her leg, rather than asking for an ambulance, she begged the people around her not to call one because of the cost,” said actuary, financial consultant, and founder of the Money Health Collective Lin Shi in a 2022 interview with the Independent Media Institute (IMI). “To me, this was a stark reminder about how much of our decision-making is driven by how we view our financial situation, which is the heart of the Money Health Collective.”

The Money Health Collective (MHC) was founded in 2021 through Lin’s work with the Mira Fellowship, created to support a small cohort of cultural visionaries annually. With her experience as an actuary and financial consultant, and an innate urge to help others, Lin sought to create a program that would dissolve the stigmas around money and provide knowledge for those who have never been exposed to financial expertise in any form.

Lin said financial well-being is the “foundational pillar” of all other aspects of well-being because financial distress can have a huge impact on mental health as well as physical health.

To combat the taboo associated with talking about financial health, the MHC created a safe, online space for people across all demographics to meet and speak with each other in what Lin called “money conversations.” For participants who decide to take their financial education to the next level, the collective conducts “money journeys,” which virtually unite disparate cohorts of strangers to share and learn from each other’s financial experiences through a series of creative exercises designed by Lin.

After facilitating a number of money conversations and journeys in the year since founding the MHC in 2021, Lin had observed that the concerns participants from all demographics shared were centered around debt, housing insecurity, emergency funds and savings. A psychological similarity, which Lin has observed in participants rich and poor, was visible when they started comparing their financial situation with others.

“A certain anxiety comes when people start comparing,” said Lin. “Most people feel financially fine until they find someone who has more than them, and suddenly they don’t feel so well. I’ve encountered this all across the income structure.”

Once participants overcome their initial envy and start to build camaraderie through the money conversations and money journey, Lin found that sharing stories about personal finance left people feeling empowered and more confident about their relationship with money.

“At first there’s always the awkwardness and tension on a Zoom call, but seeing people open up and share their stories and light up by the end is very powerful,” said Lin. “And after a few weeks, or between sessions, when participants tell me they feel less burdened, I feel very grateful to be able to facilitate these spaces.”

With the MHC still in its early days in 2022, Lin was testing new iterations of the money journey and using what she’s learned to keep strengthening people’s relationship with personal finance and squash the stigma around discussing money. One of her long-term goals was to create a small army of financial coaches through the collective.

“I think there is such a need for financial education and support in the world, and if we can train people to be financial coaches through the collective, they can use what they learned as a flexible income stream for themselves and help to support others at the same time,” said Lin. “In the long term, I’d love to provide some level of financial support for members of the collective so that those who are financially struggling can continue to grow.”

Nowhere is the stigma around money stronger than in the workplace, and sometimes that is no different at a cooperative business, according to Alex Fischer, bookkeeper and worker-owner at A Bookkeeping Cooperative (ABC), which focuses on bookkeeping, consulting and training for the solidarity economy.

“All too often, we were seeing co-ops that were being democratically managed, but when it came to their finances, one person was in charge, the process wasn’t transparent and the whole team wasn’t empowered to participate,” said Fischer in a 2022 interview with IMI.

To demystify the world of budgets, expenditures and surpluses for all cooperative worker-owners and justice-oriented organizations, Fischer and their organization ABC, along with a small circle of bookkeepers and strategists from cooperatives like AORTA and the TESA Collective, banded together to create the Cooperative Financial Education Kit (CFEK). The downloadable kit would include self-facilitated exercises ranging from 15 minutes to several hours aimed at educating participants on organizational budget creation as a collective, the history of racialized capitalism, and understanding cash flow statements.

“We also have games,” said Fischer. “They’re super fun for those of us who nerd out on finance and gaming. In general, bringing fun into the [financial education] process is part of our ethos because people relax and actually retain more information.”

Have you signed up yet?

We’re building a guide for everyday life, where experts will educate you about our world.