Less pay and financial insecurity are causing more hardships in Latino families
Many Americans work hard just to make ends meet, but Latin Americans are struggling much more than the rest of us, and it’s affecting their long-term finances.
Life insurance company MassMutual discovered that one-third of Hispanic families have less than $500 in emergency savings and are less likely to pay off debt and save for retirement.
Not having a decent amount of cash stashed away for emergencies means you’re putting yourself at risk for more credit card use, taking longer to pay off balances, and taking out loans — all of which will make your credit score plummet. Latin Americans are doing this more than other Americans.
It’s not just emergencies that Latin American families aren’t prepared for. They also aren’t great with managing their money.
“Latinos in the workforce find it more difficult than others to manage their monthly finances and nine in 10 attributes this difficulty to high levels of debt and not having enough money,” the study says. “More than half worry about household finances at least once a week.”
The financial struggles these families face isn’t the only problems they’re facing. No emergency savings, no retirement, and barely being able to afford monthly bills put them at risk for other money disasters.
Data from Bread for the World, a Christian organization that works to end worldwide hunger, shows that more than 18 percent of Latino households struggled to feed their families last year. Almost one-fifth of Latin American families live below the poverty line. That number almost doubles when the homes are headed by an undocumented woman.
Even more, Latino children are twice as likely to not have any access to nutritious food as their Caucasian friends. These families are more likely to struggle financially compared to other races nationwide.
“Latinos make significant contributions to our country. Yet, despite their hard work, there are millions of families who are unable to make ends meet,” says Bishop Jose Garcia, senior advisor at Bread for the World. “Latinos have played a key role in strengthening the U.S. economy. With a stronger economy, our nation can better invest in programs that reduce hunger and poverty.”
Bad budgeting = bad living for Latin American households
Low savings and not a lot of education on money puts Latinos at a greater risk of low credit scores and hurting their credit histories.
Fortunately, more Latin families are checking their credit histories compared to others nationwide, and the vast majority — 81 percent — are taking active steps in fixing errors.
Nine in 10 Hispanics have checked their scores because they are actively looking to buy a home or get a loan, which means they’ll need a top-notch score to get a good rate on either a loan or a mortgage (or both). They’re already working toward getting rid of bad marks, and they’re doing so more than other U.S. adults.
MassMutual says there are some ways that Latin families (and others) can make sure they are working toward financial success, including:
- Making a monthly budget to see exactly where every dollar goes.
- Start to save for retirement, whether through an employee or other independent options like a 401(k).
- Calculate major, long-term expenses like college tuition for kids.
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Article last modified on November 3, 2017. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Latin Americans Have It Worse Than Other Americans - AMP.