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How and Why Should Financial Wellness Be Part of Your DEI Initiatives

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There is a persistent narrative in some circles that diversity, equity, and inclusion (DEI) initiatives are only the purview of HR departments. While much of the initial impact of a DEI push will be seen in more diverse hiring, that is only the beginning of a true DEI effort.

In order to truly foster equality among an organization’s employees, there must be attention paid to the intersection of financial wellness and DEI. This may seem like a statement that comes out of left field, but it is actually incredibly important.

According to the National Community Reinvestment Coalition, wage gaps have improved significantly since 2013, but they still exist between different ethnicities and between men and women of every ethnicity in the United States.

By making financial wellness education a central part of diversity initiatives, those initiatives help people from marginalized communities establish wealth and break the cycle of living paycheck to paycheck that keeps people from living their best, most fulfilling lives.

Increasing financial wellness can also be a part of community outreach. For example, by sponsoring a financial literacy program in the schools in your community, you can help create a future workforce that already understands important financial wellness practices.

Before getting too far into how to incorporate financial wellness into DEI initiatives though, it is important to understand why finances and diversity are so tightly intertwined. 

How Financial Wellness and DEI Connect

In order to confront the lack of diversity in many organizations, the problem needs to be addressed from multiple angles. It is not simply a matter of diversifying new hires to hit a quota.

To make diverse representation a reality, diverse voices need to be heard throughout an organization—from the entry level to the executive suite. This allows an organization to fully benefit from those diverse voices and grow accordingly. 

With diverse voices peppered throughout an organization, you get people with unique perspectives not only confronting challenges and problems, but finding diverse solutions too. This can mean anything from developing new products and services within new markets or tackling a persistent issue from a new angle that can put that issue to bed once and for all.

But representation is just the first step. According to a 2020 American Staffing Association survey, financial issues were significantly more concerning to minority workers than their white counterparts.

One of the reasons non-white workers are historically more worried about finances than their colleagues is because of wage gaps. In the United States, women have historically made less money than men in similar positions and non-white people have made less money than white people in similar positions.

Now, addressing the wage gap is very important, but even in companies that have done work to close those gaps, financial concerns are often still higher in people from traditionally under-represented groups.

Why is that?

The difference can be boiled down—in many cases—to financial education. Most states have no personal finance course requirements to complete a primary or secondary education. And in states where these courses are offered anyway, the schools that offer them tend to be in wealthier areas like affluent suburbs.

Public school districts in America are typically funded by property taxes and because members of, for example, black communities have faced more historic barriers to owning property, the schools in those communities have not been as well-funded. This can result in financial literacy scores in these communities averaging out to be 21% lower than those in more affluent communities. 

By including financial wellness in DEI, you help ensure that the people in your organization all have opportunities to end the cycle of living paycheck-to-paycheck. They can start to build wealth that can benefit them and their children—creating a new, positive cycle that leads into the future.

So what does that look like? And who benefits from it?

Benefits of Combining Financial Literacy and DEI

The greatest benefit to combining financial wellness and DEI is an organization with a more focused team. Financial concerns stress people out and it is difficult to leave those stresses at home—they are going to come into the office and cause quiet distractions.

These distractions are quiet because people tend to keep their financial worries to themselves. This results in people trying to complete tasks at work while being distracted by a constant buzz of financial stress dividing their focus.

Providing financial educational opportunities as part of a benefits package that is linked to your DEI initiative helps alleviate that problem. 

These efforts to reduce financial stress can take several forms. Providing financial wellness resources such as pamphlets, video tutorials, guidebooks or granting access to a database of helpful articles is common.

Some organizations even offer programs that include personal finance guidance from experts in the field. This is a particularly effective measure for people from minority backgrounds. When someone has never had access to that kind of service, reaching out to learn more for the first time can be intimidating.

These efforts to provide team members from any and every background with the resources needed to improve their financial wellness create a happier, more focused workforce. A team that feels cared for by their organization is more likely to stay with that organization and tend to work harder with better overall performance.

Considering the benefits of a financial education program, why should it be tied to DEI? Should it not just be part of the benefits package anyway? 

The reason that combining financial wellness and DEI is so important is because it encourages the team developing the financial education and literacy initiative to take into account the different needs of a diverse group.

By factoring in the different educational requirements of a diverse group, over time, the entire group can achieve similar levels of financial knowledge and equity.

Reaching Beyond a Single Organization

Incorporating financial wellness and DEI within a professional organization improves the lives of the people that have been hired by that organization—but can a longer view be taken? What about giving people who don’t normally have financial education in school access to financial wellness tools?

NTC has developed educational programming to teach financial wellness fundamentals to students in age groups that range from elementary school through high school. These programs have been put together by experienced educators and are designed to be accessible to diverse student populations.

Incorporating interactive, live performance elements alongside supplementary educational materials that will help teachers shape effective financial wellness lesson plans, NTC’s programming is an excellent resource for rural, suburban, and city schools.

By making NTC a part of your organization’s community outreach initiatives, you can help create a new generation of financially savvy workers. In a sense, you would be spreading the goals of your financial wellness and DEI push into your community as a whole.

That means a more stable community, a wealthier community and a happier community—no matter where the people in that community come from.

Knock Down One of the Biggest Barriers to Equality

Again, good representation is just the first step toward a more equitable workplace and society as a whole. Diversity, equity and inclusion initiatives that stop at the hiring phase do not go far enough.

By incorporating education surrounding financial wellness and DEI initiatives, an organization helps close the gaps that have arisen between people from traditionally underserved communities and those from more privileged backgrounds.  

These education programs result in happier workforces with less turnover. A stable team with less financial stress bogging them down produces stronger results. The benefits are clear.

Those benefits can also be spread into a community as a whole through sponsorship of financial education programs like those offered by NTC. Giving diverse students access to lessons that teach them positive habits and tools to help establish their financial wellness at a young age serves a community in many of the same ways that financial wellness and DEI initiatives benefit a professional organization.

Marginalized communities have faced intense barriers to building wealth and financial equity throughout the history of the United States. By making financial literacy a part of your DEI objectives and as part of your community outreach, you help to create a more equitable society moving into the future.

How and Why Should Financial Wellness Be Part of Your DEI Initiatives