Jan 23

Jan 23 Reflections on Power and Money

Power and money are inextricably linked; yet money is not the only power that gives us strength.

This post was inspired by an episode of the podcast Hidden Brain with host Shankar Vedantam entitled Emotional Currency: How Money Shapes Human Relationships. In this episode he explores the history and evolution of currency. Listen to the end of the episode where he discusses the topic of power and money, as money is oftentimes seen as a proxy for power.

This got me thinking to the work that you do in the field of financial capability. By supporting your clients in their quest towards greater financial stability, you are in a way helping them to have more power in society.

I thought that this was a fascinating concept to consider, since as a female-identifying person I tend to think of my wealth as a sort of security blanket, or even an insurance policy – something to protect me when things go wrong and I am not able to earn income. I will admit to you that I have never thought of my wealth as a symbol of my power in society.

Have you?

Personal Power in Its Many Forms

As I sat down to write I thought to myself, “Money can’t be the only power there is, so what other types of power are there?” In short time I came across this article by Ronald E Riggio Ph.D. in Psychology Today. In it he explains the Five Powers as originally described in 1959 by John French and Bert Raven:

Expert Power: Expert Power comes when you are seen as an expert in some subject area. And once you have mastered this first area, this aura can spread to additional areas where others will defer to you, assuming that you are competent and capable. Examples of expert power are those who have expert knowledge, maybe through an advanced degree or special certification. Others might hold power because they have experienced a life event that you aspire to, like having traveled abroad or having purchased a home.
Reward Power: Reward Power is your ability to give someone else rewards. Having money is a type of Reward Power because you have the resources to share as you choose. If you know someone who appears to have a lot of money, you may give them more power in your relationship because you assume that they have more access to resources (and someday they might share those resources with you). But money is not the only type of Reward Power. The distribution of rewards through words of affirmation or even a warm and open body language is a type of Reward Power.
Legitimate Power: Legitimate Power is the power that comes with a specific title or someone with authority. People like the principal of a school, the minister of a church, or a police officer have legitimate power because someone or some entity has granted them that specific title.
Referent Power: Referent Power comes from being relatable and likable. If someone you know has a magnetic personality, you may give them more power in your relationship for their ability to be able to connect with others in a meaningful way.
Coercive Power: Coercive Power is when one person has the power to punish another person, thereby coercing them into some sort of action. This can be a dangerous type of power to inflict on another person and therefore is best avoided when other types of power can be used instead.

When you consider that there are five types of powers, you realize that money, or Reward Power, is only one of them. And while you work to create opportunities for your clients to make and keep more of their income – and in turn grow their assets – there are other things that you can do to promote the personal power of your clients.

This leads me to ask…

How Much, and What Kind of Power Should Your Clients Have?

Yes, you want your clients to make and keep more of their money, as having money is an example of Reward Power. You’d like them to climb as high on the economic ladder as they wish, and to be able to manifest their own destiny and to share their riches with whomever they choose. What are other ways to promote personal power in your financial capability practice?

Facilitating Expert/Legitimate Power: Awarding Certificates of Completion is one example of conveying to your clients that they have achieved a certain level of expertise in the work that they do with you. While they might choose to take their certificate home, frame it and put it on their wall (to show off to visitors), awarding a certificate has the effect of conveying to your client that they have put in effort and developed their financial skills.

You might also facilitate the acquisition of professional certificates or even degrees through partnerships with educational institutions, as acquiring higher education makes your clients more competitive in the workplace and therefore able to compete for higher paying jobs.

Facilitating Referent Power: How would you develop referent power in your clients? I think that this comes from modeling behavior that enhances your clients’ sense of self-worth, and “calling out” when you notice that your clients have made strides with their money.

A client once entered my program expressing her feelings of shame and low self-worth around money, the classic “I’m bad with money” script. After months of working with me to develop her personal finance knowledge and skills, I watched as her self-confidence rose in correlation to her bank balance. She went on to mentor her adult daughter and granddaughter on their money management, exhibiting not only Referent Power but also Expert Power, and shining in her role as a leader.

How Much, and What Kind of Power Should Financial Capability Professionals (Like You) Have?

Okay, Reader, now I want to talk about you and your power. I’ll admit that this is a loaded topic. Many Talking About Money Community members work in nonprofit settings where you perform exceptional work for modest compensation. As mission-driven professionals you have made implicit (or explicit?) agreements to work for less-than-competitive wages in order to do work that you find meaningful. Within the broader society you have less Reward Power than do your corporate-job peers where compensation is much higher.

In your work to develop the knowledge, skills, and abilities of your clients, you may be so successful that your clients end up making more money than you do. This reminds me of a celebration event my colleague attended a few years ago at a nearby financial capability program:

A newly-graduated client was at the mic ready to give her testimonial, with a row of proud staff people standing behind her. This client was a single mom who had spent years working on her finances and pursuing her education in order to provide a better life for herself and her family. She explained to the appreciative audience what she had gone through to get where she was in her job at a local corporation. When she told the crowd that she could have never predicted that one day she would be earning close to $80,000 a year, one of the staff member’s face dropped.

In that moment it was clear to my colleague that this staff person recognized that her client, who had relied on her for so many years, now had more Reward Power (in the form of her salary) than she had.

What does that mean, to work with clients who end up making more money than you do? Do you willingly accept this because you are committed to justice and want to see the best for others? Or are you a bit conflicted, because after all, you work hard, and it can be grueling month after month to support a household/help family members/pay off your student loans/save for a down payment, all on meager nonprofit salaries.

And yes, you do have other types of personal power:

You have Expert Power in the field of Financial Capability (and most likely in other areas as well!)
You most likely have Legitimate Power through your attainment of diplomas, certificates and degrees
I am sure that you have Referent Power, and that you are well-liked by those around you, allowing you to effectively build community and pursue justice

And please be clear that by no means am I trying to set up an Us Vs. Them dichotomy, pitting you against your clients. This is simply a preliminary reflection of power and money in society.

As with most topics, I have questions that far outnumber my answers.