6 steps everyday people can take to close the wealth gap

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

  • When I talk about "financial equity" as a personal finance blogger, I'm talking about closing the gap between what women and people of color earn compared to their white male colleagues.
  • It will take systemic change to truly achieve this goal, but there are things we can do now in our everyday lives to help that process along.
  • Acknowledging financial inequality is a start. Then, we need more pay transparency at work, to act as financial allies, and to change workplace policy to ensure pay gaps are closed for good.

I consider "financial equity" to be the process of closing the gap between people earning different incomes for the same type of work.

Or, to put it bluntly, helping women and people of color bridge the well-documented gap between their rate of pay and that of white men. So, how on earth would that work? 

In my personal experience as both an employee and entrepreneur, I've done a few things to grow my income and close that gap, including gaining access to financial communities that educated me about money, and connecting with individuals who were transparent about what they did to grow their income. 

It will take major systemic change to truly root out financial inequality, but there are some things we can all do today to start the process.

Acknowledge that financial inequality exists

It's important to acknowledge that financial inequality exists and persists for women and people of color. These are facts that have been documented for years. The reluctance to admit how financial inequality affects different groups is problematic because it's difficult to address what we don't acknowledge. 

Embrace financial transparency

Americans are often reluctant to share what they're being paid. In fact, many organizations discourage employees from sharing information related to their compensation. 

However, my income as an entrepreneur began to grow only after other entrepreneurs shared a few facts with me, including what they were charging for similar services, how they validated those charges, and what they were being paid for collaborations with brands. 

As a 9-5 employee, learning what my colleagues were earning helped me to know if I was being underpaid for my role. Happily, there are now digital resources that employees can access in order to research average pay rates for their professions, such as PayScale. 

Find financial allies

I love the financial allies I've had in my life. These are people who have made it a point to help me better my finances and not be in the dark about the tools, resources, and people that can help me grow my income. 

What can financial allies do?

  • Share opportunities that underrepresented individuals might not have access to because they are unaware of the opportunity
  • Give guidance on the gatekeepers to seek out within organizations. Gatekeepers are the people who stand between you and the resource or person that you would like to access or connect with
  • Acknowledge their role in other people's financial lives. For example, are they working in positions that have a direct connection to someone's ability to access resources, such as mortgage lending? If you work in human resources, how do you communicate the best way to negotiate for better wages within the organization, or how to access retirement tools offered by the company you work for? 

I've been a financial ally for many different types of people, and it's a wonderful feeling to help someone through small actions that make a big difference in their lives. 

Talk about workplace policies 

Currently, there is a lot of discussion related to organizational policies and how they affect workers, such as diversity in hiring, racial and gender pay gaps, and "at-will" employment rules. 

If you've been frustrated with your organization's policies, now may be the ideal time to revisit that conversation. Do be mindful of how your push for better policy may potentially impact your employment in both positive and negative ways.

Invest in under-resourced people and communities 

Financial investments can come in both small and large amounts. Netflix recently announced a $120 million donation to HBCUs, or Historically Black Colleges and Universities. This investment will have a long-term effect on the students who benefit from that gift. 

In the past few weeks, we've seen a number of these types of donations, and they will resonate in those communities for a long time to come. 

If you're looking to make donations to an organization that you're in alignment with, know that those donations make a difference to the recipients, even if they're not in the millions. 

I've been on the receiving end of a few types of investments that have changed my life, such as scholarships to attend conferences and information on volunteer opportunities for events that I couldn't otherwise afford to attend.

Address earnings parity

Finally, a conversation about financial equity wouldn't be complete without talking about focusing on earnings parity with white men. If white men are making the highest income on average of any group, then focusing on moving towards financial equity includes working towards earnings parity. 

If you're in a position to assess compensation inequality — or can encourage your company to study its pay gaps and address them — push for change and make sure checks and balances are set up to keep your workplace accountable to its stated goals.

Michelle Jackson runs the website and podcast Michelle is Money Hungry, and is the founder of the Money on the Mountain retreat focused on financially empowering single women.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

Source: Read Full Article