Why we can’t prescribe budgeting without a livable wage

Budgeting can’t fix someone’s finances if they don’t earn a livable wage. Here’s what Shia Azu learned about teaching personal finance.

Guest author: Advocate, writer and leader of peace equity are a few of the titles Shia Azu holds. As a nonprofit professional, she has served over 150,000 humans and continues to connect families with resources as a founder of Centerpeace of Life Inc., a nonprofit that promotes health equity and inner peace.

I was a senior case manager at a homeless shelter and transitional housing program. I thought I was doing the right thing by urging families to look at their expenses and finances weekly. Little did I know this requirement to create a budget was a weekly reminder that they could barely provide necessities for themselves or their families. 

I was sharing the knowledge from training and the wealth gurus of my time, and I didn't know the emotions and insecurities I was helping to grow.

I didn't know the emotions and insecurities I was helping to grow.

Nonverbal cues of being uncomfortable and closed became more evident as I discussed finances and budgeting practices in case management meetings. My mind pondered as I observed the shifting in the seats and folded arms of those I thought I was helping with budgeting information. 

Empathy and compassion stepped in and beaconed me to look beyond protocols. It became evident that traditional budgeting advice was borderline irrelevant based on the socioeconomic statuses of our participants. Budgeting isn’t a sacred path to financial freedom when someone is on the road to overcoming poverty and adverse socioeconomic conditions. That path takes know-how, relationships and many valuable resources. 

As I sifted through the bank statements, pay stubs and spending accounts, requesting halted spending on this or that, I would ask questions about this dollar spent here and why not save this over there. When I stepped back, I realized I wasn’t authorized to tell anyone how to budget the money they earned. I learned advising other grown adults to skip a cup of coffee now and then wouldn’t change their lives. 

It felt inhumane of me to ask a single mom to save money by skipping her one takeout meal a week when that was her awaited night to rest from cooking. A woman in our program explained she wouldn’t reduce her gym membership package because it was like her therapy as an uninsured worker. Those meetings taught me the differences between poverty, minimum and livable wages. 

The wage paradigm shift left me realizing how inhumane budgeting and financial planning can be. The thought of saving dollars and cents at the expense of moments of rest and a wanted item here and there was saddening. Why do minimum wages even exist if it’s not livable? Shouldn’teveryone be paid a livable wage for the time and energy they give to their work? These questions swirled as I reviewed the net pay amounts of pay stubs.

Budgeting principles are too basic to overcome generational financial disparities — my inquiries and preaching of the budget gospel ceased with this shift in thinking. 

Budgeting principles are too basic to overcome generational financial disparities.

My questions were no longer about spending less; instead they were about earning a livable wage. I stopped calculating all the withdrawals, started adding skills to resumes and sought career opportunities. Job searches were no longer about having enough to pay for current expenses and more about financing how someone desired to live in the future.

Budgets were no longer center stage in our finance check-in meetings, and condemnation surrounding current financial circumstances dissipated. Optimism and future planning were easier to discuss without the weight of current lack looming. Our meetings and discussions improved because we stopped looking at present negatives and started planning for financial possibilities to gain soon so that budgeting made more sense. 

To ask a human to budget before obtaining a livable wage is inhumane; it lacks empathy and support for the current state of finances and the stress of not having enough. 

To ask a human to budget before obtaining a livable wage is inhumane.

No one can adequately budget without adequate funds, and rehashing negative budgets can do more harm than good by repeatedly witnessing financial deficits without solutions. There is a prerequisite to useful money management, which is to make a livable wage. Any budgeting program without this prerequisite is in error and will lead to adverse outcomes.