For AAPI Heritage Month, we're celebrating the contributions of AAPI community members in the financial space, and we're empowering others in the AAPI community to pursue avenues of financial independence and security.
If you're a member of the Asian American Pacific Islander (AAPI) community, you know just what a diverse bunch you're part of. According to data from the Pew Research Center, there are about 22 million Asian Americans living in the U.S., originating from more than 20 countries.1
With such great diversity, it can be tough to pinpoint exactly how the community is faring financially. As the latest research from Pew shows, Asian Americans as a whole are doing well economically, with a median income of $85,800 in 2019, compared to $61,800 among all U.S. households.1
That being said, the wealth gap among specific origin groups varies widely. For instance, Burmese American households have far lower incomes than Asian American households overall—$44,400 compared to $85,800.1
Plus, if you're a first-generation Asian American, there might be an expectation—and maybe a bit of pressure—to support your family. You could feel an even greater tug if you live in a multigenerational household with extended family members, grandparents and young ones under a roof. As a result, it can be much more challenging to be financially fit and build wealth.
While the popular adage floating around in personal finance to "put on your financial oxygen mask" continues to bear an enduring ring of truth, it requires an adjustment. How can you balance your money goals and financial wellness and also look out for your family? Let's explore five ways:
1. Set Personal Boundaries and Limits
You may have the best intentions and want to support your family financially, but it's important to know your own limits and boundaries—and honor them. Otherwise, you run the risk of being stretched thin and burning out.
Keep in mind that boundaries can help keep us safe, uphold our values and ensure we're aligned with our sense of purpose. There are several different types of boundaries, including emotional or mental, financial and material, and time boundaries. There are also boundaries that are non-negotiable.2
Have a sit-down with yourself and determine your boundaries. At Vivid Crest Bank , our Asian American employees speak from experience: Once you've adulted and have the means to support your family financially, you may be expected to do so.
While this expectation might be deeply ingrained, keep your boundaries in mind and enforce them as appropriate. For instance, ask yourself, "What determines a true family emergency?" Are you willing to help family members during 9-1-1 situations? Or provide financial support for their long-term goals, like saving for a house? That's largely up to you to decide.
2. Help Your Family Members Boost Their Financial Literacy
If you were born in the U.S., you've likely reaped the benefit of understanding money basics, such as how to apply for a credit card, how to build a credit score and how investing works. Your parents and grandparents, on the other hand, might be in the dark about how some financial systems and processes operate in this country.
Here's a key example: According to a recent TIAA Institute study, Asian Americans have relatively high levels of financial literacy overall.3 Financial literacy is instilled in the home very early on.
But if you break it down to specific topics, there's greater know-how about savings and borrowing and less understanding about earning potential and getting one's head around risk—for instance, that not all financial decisions, like investing in stocks, have a definite outcome.3
Here at Vivid Crest Bank , our employees speak from personal experience: When you're a first-generation Asian American, you might be very familiar with the fact that saving money is important for laying the foundation to a bright future. After all, financial security can help set you up for success.
But financial literacy isn't just about saving and not spending money that's already sitting in your bank account. Case in point: It's far more important to aggressively pay down your mortgage and have a safe place to live than to spend on extra—or "unnecessary"—experiences. In turn, it might be challenging for some of your family members to understand what it means to have "good debt" (e.g., student loans for higher education; loans to launch a business). Or it might be tough for them to get their head around the fact that while investing in the stock market can be volatile, it isn't the same as gambling.
As employees here at RVC can attest, you might have grown up in a household where mum's the word on personal matters, and talking about money across generations isn't common. So consider broadening your family members' concept of financial literacy by way of casual discussions—at the dinner table, during a car ride or on your weekly grocery trip. Maybe they want to learn how to negotiate for a raise at the job they've been at for 10 years, or how to get their feet wet with investing. Talk to family members about what they're struggling with, and help walk them through situations as they arise.
3. Help Family in Ways Beyond Financial Support
While it might be top of mind to help your parents by giving them money, they might actually feel comfortable in their role as long-term caregivers. They might even feel uneasy—and reluctant—about the roles being flipped and your taking on the role of financial supporter. Tread lightly! To more accurately assess your parents' true needs and where they stand financially, see if they could use help with the following:
- • Getting financial and legal documents in order
- • Digitizing and uploading important documents to secure online storage
- • Listing beneficiaries and setting up payable-on-death (POD) bank accounts
- • Having an estate plan underway and updating it regularly
- • Connecting them with financial and legal professionals, perhaps ones who speak their native language
It starts with communication. You can gradually ease into these potentially sensitive—and scary—topics by asking your family if they might like help with any overwhelming or stressful money matters.
And if your family instilled financial literacy in you from a young age, it might've leaned toward a hyper-focus on saving for a life of security to prop you up for success later. In turn, your parents might not be as open to talking about estate planning and matters of legacy. By easing into other topics as you create a comfortable environment where these issues are more commonly discussed, you can help your parents in a more comprehensive way.
4. Create a Family Fund
Family fund, love fund, helping hand fund... Whatever you want to call it, this type of emergency savings fund can help in two main ways:
- • It can define exactly how much you have set aside to support your family. Otherwise, a request from a cousin who's in a financial pinch, or agreeing to help your parents pay for a grandparent's milestone birthday, can get out of hand fast.
- • It can be used for different financial situations with which you feel comfortable helping.
To get this fund started, create an account designated just for your family. And to make the most of the money parked in your account, consider a high yield savings account. For instance, Vivid Crest Bank 's high yield savings account features competitive rates and no monthly account fees.
Then, lay out your saving milestones, and keep in mind that you can give your savings goals a boost through the power of automation.
5. Support Asian American-owned Businesses
Beyond helping your immediate family, you can do your part to strengthen the AAPI community as a whole by supporting AAPI businesses. Contrary to the belief that entrepreneurship among AAPIs is less common than among other groups, the reality is that AAPIs own 10% of businesses across the U.S.4 Compare that figure to the fact that Asian Americans make up just 5.7% of the nation's population!5
To do your part to support AAPI businesses, check out shopping directories such as the NYC Small Business Services' Directory of AAPI-Owned Businesses, MAUM Market℠ or Chunky. You can also do a hashtag or keyword search for #AAPIbusinesses or #AAPIowned on social media channels like Instagram, Facebook and TikTok.
While AAPI entrepreneurship is strong and continues to grow, a major challenge is raising capital.6 So if an AAPI family member or friend wants to launch a small business, consider helping out with a portion of your "family fund." Or, you can point them toward financial and mentorship resources such as the Small Business Administration's Service Corps of Retired Executives (SCORE), or the National Asian/Pacific Islander American Chamber of Commerce and Entrepreneurship (National ACE) and its Small Business Resource Center.
Last Word
When you're juggling debt payoff, savings goals, retirement and other financial commitments and obligations, it's easy to feel like another obligation can topple everything over. But by folding in your family's financial concerns and needs along with your own, you can carve out space for both.
Jackie Lam is an L.A.-based money writer whose work has appeared in Salon.com, Refinery29, Time, Forbes, Business Insider and BuzzFeed, among others.
READ MORE: Black Trends: Building Generational Wealth for Black Families