7 Financial Considerations for Interracial and Intercultural Couples
Being a part of an interracial or intercultural couple requires thoughtful exploration of financial beliefs and values in order to establish a shared vision moving forward. Acknowledge that you and your partner will both need to make concessions - you will never convince your partner to change all of their financial beliefs and behaviors, and you shouldn’t! Similarly, they will never convince you to change all of your financial beliefs and behaviors, and they shouldn’t! Everyone’s financial beliefs are unique and carefully crafted throughout our lives. No single race or culture is perfect in terms of finances - we can all learn from one another. Try to see this as an opportunity to create a financial path forward that is distinct to you and honors both of your cultures and upbringings. It is okay and completely normal to feel uncomfortable while exploring potential changes. Use your creativity to venture into the gray areas, knowing that financial conversations will be ongoing and financial plans adaptable.
1. Intergenerational living is common throughout the world and provides many physical and mental health benefits to all family members. Intergenerational living can look different among different cultures; therefore discussing your expectations for the future are essential. White western people on the other hand are generally more individualistic than other races and ethnicities and are more likely to move into assisted living facilities as they age. Neither approach is right or wrong, and both impact decision making and have financial implications worth considering. For example, if you would like to have an intergenerational household, consider a main floor bedroom and full bathroom before making a home purchase for accessibility purposes. Or if your parents plan to live in an assisted living facility, consider several factors including proximity, payment structures, and specific supports provided (level of care, memory care, etc.). Questions to ask one another include:
“Do you know where your parents would like to live as they age? Do they have any expectations of us to provide financial and \ or physical support?”
“How can we prepare for my parents to live with us in the future?”
“If your aging parents live with your brother, will we provide him financial assistance, so he can support them?”
“What feelings does intergenerational living versus assisted living facilities bring up for you?”
“Would we like our children or grandchildren to live with us one day? If so, what expectations would we have of them to contribute to household expenses?”
2. Inequality of intergenerational wealth is real. White people are far more likely to receive a financial inheritance than any other race or ethnicity. Entering into a financial relationship with a partner who has intergenerational wealth can lead to feelings of inadequacy, discomfort, and fear. You may even experience imposter syndrome (believing that you are inadequate, incompetent, or unqualified). You may be suddenly presented with new financial considerations, such as receiving a large inheritance. You also may be in situations that you and your parents have never been able to navigate, such as meeting with a financial advisor. Additionally, feelings of guilt, anger, and confusion can arise as you have even a fuller experience of the ways in which capitalism makes the wealthy wealthier at the expense of others. Money scripts that you have held deeply may be challenged. Internal struggles as well as struggles with your partner and possibly even your family (all of whom may not understand your experience) are completely normal and valid. Explore and allow space for your feelings to expand and to be challenged.
On the other hand, knowing as a child that you will one day receive an inheritance instills, at a very deep and foundational level, a sense of safety and security. This safety and security may be subconscious. Even though you may think “I would never ask my parents for money”, ultimately knowing that you could ask them for money and that they would have the means to provide assistance is an immense amount of privilege. Safety and security can allow for increased risk taking, such as pursuing entrepreneurship or travel. You must remember that intergenerational wealth is always impacting your financial beliefs and decision making. If you have intergenerational wealth, you cannot and will not ever know the experience of not having intergenerational wealth and the complex and long-lasting impact that not having intergenerational wealth can have on someone. Questions to ask one another include:
“What does your financial safety net look like (emergency savings, unemployment, second job, an inheritance, etc.)?”
“Would we like to create intergenerational wealth for our children and grandchildren? If so, what steps can we take now to begin that journey?”
“What do you need to feel financially safe and secure?”
“In what ways do you feel that my intergenerational wealth impacts you? How can I support you?”
“How do you feel about the differences in intergenerational wealth within our families?”
3. Familial financial support and customs - both in terms of giving and receiving. Different cultures have different financial customs and expectations that are often established without discussion. For example, in some cultures, the patriarch of the family pays for dinner, while in other cultures the working family members or the highest earning family members pay for dinner regardless of age. People have different levels of comfortability with giving and receiving gifts, especially financial gifts. In fact! People can have very different definitions of what a financial gift even is. For some people, a financial gift is any amount of money to anyone. For others, money to family is not considered a financial gift - rather, a joy, a responsibility, or an afterthought. Again, no one’s definition of a financial gift is right or wrong. There is no universal definition, and there shouldn’t be! Explore your approach to financial gift giving and receiving until you find a solution that works for both of you. Note - finding a solution that works for both you does not mean that you will feel 100% in your comfort zone. With any change, feelings of discomfort, worry, etc. are common.
Questions to ask one another include:
“How do you define a financial gift and financial support?”
“Who in your family is typically responsible for paying for things (vacation, dinner, etc.)?”
“How do you feel about primarily receiving financial gifts and \ or support from my family?”
“How do you feel about primarily giving financial gifts and \ or support to my family?”
“What alternatives can you imagine that merge both of our cultures’ and families’ financial customs?”
4. Distrust of mainstream financial institutions. Due to financial discrimination, gatekeeping, and exploitation throughout generations, from racial wage gaps to banks denying mortgages to people of color, many people have a deep distrust of mainstream financial institutions, such as banks, credit cards, etc. Alternatives, such as mutual aid in the form of communal or familial sharing, are common in many cultures and replace mainstream financial institutions. Additionally, historically financial ‘best practices’ have been determined by wealthy white men.
While these ‘best practices’ may resonate with other wealthy white men, they may fall short for people of color (who continue to battle redlining and the persistent impact it has), women (who only received the right to open their own credit cards in 1974 - 16 years after men!), and queer people (who continue to experience employment discrimination, particularly among the transgender community). Even prior to legally merging finances, couples can openly acknowledge the privilege that comes in terms of earning potential based on their race and \ or ethnicity. Open-mindedness to managing finances differently than you have before can feel scary - move through the conversation with awareness of how financial systems have impacted your experience. Questions to ask one another include:
“How much do you trust in financial institutions and why?”
“What messages did you receive growing up about financial institutions?”
“How can we merge our finances in a way that feels equitable based off our income discrepancies?”
“How do we want to contribute to or break down financial institutions that are currently in place?”
“Do we want to pay Voluntary Land Taxes to native nations as we live on indigenous land?”
5. Lifestyle considerations, such as the neighborhood you would like to live in and the school you would like to send your children to, can look different among interracial and intercultural families. US cities vary in terms of segregation, and for many interracial and intercultural couples, this can present a challenge - finding a neighborhood or community that represents both races \ cultures. Another potential lifestyle consideration is visiting family who are living in other countries. The financial implications of these visits can vary based on frequency of visits, length of visits, cost of flights, cost of living (staying with family v staying in a hotel, etc.). Thoughtful planning is necessary in order to ensure these visits happen. Additionally, the number of children people generally have can vary greatly depending on culture as well as expectations for children to attend college. All of these decisions have a price tag attached - a factor although not necessarily the be all end all.
Questions to ask one another include:
“Is it important to you that we live in a neighborhood that represents both of our cultures?”
“Would you like our children to attend a bilingual school or to have a bilingual tutor to learn your native language? If so, how can we financially prepare for this?”
“How often and for how long would you like to visit your family abroad?”
“What financial values would we like to instill in our children, and how do we go about instilling those values?”
“What does homeownership mean to you and your family?”
6. Time orientation can impact financial behaviors as well as financial risk tolerance. Cultures with a strong future orientation may be more prone to save, plan and invest aggressively due to feelings of worry and anxiety. Cultures with a strong present orientation, on the other hand, may be more resourceful, adaptable, and willing to spend money to enjoy the moment. Finally, cultures with a strong past orientation may be more conservative and focused on consistent and gradual wealth accumulation. We all have past, present, and future time orientations to varying degrees. If you aren’t entirely sure if your time orientation, you can take a quiz here to learn more.
Questions to ask one another include:
“What is your time orientation?”
“How do you think your culture has shaped your time orientation?”
“How do you think your time orientation has shaped your financial beliefs and behaviors?”
“If you started to think with a present orientation, how do you think your financial behaviors might change?”
“If you started to think with a future orientation, how do you think your financial behaviors might change?”
7. Stereotypes can influence not only how others perceive us but also how we perceive ourselves. Racial and cultural financial stereotypes are imbedded in our society (as well as in this blog post!). Oftentimes, these financial stereotypes fall into two buckets - ‘positive’ (mostly pertaining to white and Asian people) and ‘negative’ (mostly pertaining to Black and Latinx people). While ‘negative’ stereotypes are obviously problematic, these perceived ‘positive’ stereotypes can also be harmful. For example, the stereotype that Asian Americans are ‘high achieving’ and ‘good with money’ neglects the very real wealth gap that Asian Americans experience, which can lead to a decrease in social services available to Asian Americans - the ripple effect. Questions to ask one another include:
“What racial or cultural financial stereotypes have you internalized?”
“What racial or cultural financial stereotypes have negatively impacted you and \ or your family and how?”
“What racial or cultural financial stereotypes, if any, do you project onto me?”
“How have your racial or cultural financial stereotypes changed or been challenged due to being with me?
“How do you think my racial or cultural financial stereotypes enable or empower me?”
