Research shows how the unique ways Hispanic Americans budget finances.
Today’s the last day of National Hispanic Heritage Month, 30 days celebrating the contributions of more than 60 million Hispanic Americans, the largest minority in the United States. Like most people navigating their way through the COVID-19 pandemic, unemployment and a faltering economy, debt and finances are foremost on the minds of Hispanic Americans.
Debt.com analyzed seven surveys about Hispanic Americans’ outlook on finances, saving for retirement, homeownership, and paying off debt. Here are the most interesting takeaways…
1. Hispanic Americans experience wealth disparities
“Long-standing and substantial” wealth disparities between white and Hispanic families haven’t changed much in the past four years, according to the most recent Survey of Consumer Finances published by the Federal Reserve Board.
The typical white family has eight times the wealth of the typical Hispanic family, according to the survey. While white families have the highest level of both median ($188,200) and mean ($983,400) family wealth, Hispanic families’ median wealth is $36,100 and mean family wealth among Hispanic Americans is $165,500.
2. Hispanic Americans’ more worried about finances
Hispanic Americans are more worried than the general population about how their families would get by financially in case of job loss, sudden death without a financial plan or major medical expenses, according to Hispanic Americans’ Financial Outlook, a follow-up to the 2019 Primerica Financial Security Monitor report.
Top financial concerns for Hispanic Americans from the survey include becoming unemployed (28%), lack of stable income (24%) and becoming injured or ill and unable to work (23%). Around 26% of Hispanics worry they couldn’t cope financially with a large medical bill and 38% lack confidence in their ability to make timely credit card payments.
3. Anxiety about retirement savings is high
About 43% of Hispanic Americans fear they won’t have enough money when they retire, and only 35% think they’re saving enough for retirement, according to the Primerica survey. Another 58% feel uneasy about retirement due to making “big financial mistakes” in the past, averaging $20,000 among respondents.
4. Latinos optimistic about homeownership
Around 47% of Hispanic Americans surveyed say they’ve been able to continue saving to buy a house despite economic uncertainties related to the pandemic. That’s according to the 2020 State of Hispanic Wealth Report, the annual report focusing on homeownership, small business ownership, savings and investments published by the Hispanic Wealth Project (HWP), an initiative formed after the 2008 Great Recession.
The report also found that Latino investors were 25% more likely to own real estate investment properties outside of their primary residence than non-Hispanic, white households.
5. Credit card debt raises concern
Around 34% of U.S. Hispanic households report having between $5,000 and $10,000 in credit card debt, according to a nationwide survey by Consolidated Credit, a nonprofit credit counseling agency. Just over 22% report having between $10,000 and $20,000 in credit card debt, and 33% have less than $5,000 in credit card debt. About 11% have credit card balances topping $20,000.
A whopping 75% of respondents say they “feel ashamed” because they owe a lot on their credit cards while nearly 25% just keep plugging away on payments without being bogged down by embarrassment.
6. Hispanic Americans eager to help family members financially
Around 44% of survey respondents in the 2020 State of Hispanic Wealth Report say that when they have extra money to invest, they like to use it to help out a family member. Latinos were also the most likely population to report expecting to take care of an aging parent after retiring.
7. Stock-based investments hindered by lack of knowledge
Roughly 48% of survey respondents in the HWP report who don’t participate in retirement accounts and more than half (55%) who don’t participate in brokerage accounts point to reasons signaling a knowledge gap.
“Latinos are more likely than the general population and non-Hispanic White households to report not thinking they are safe investments, not knowing how to invest in them or simply never having heard of them rather than not being able to afford it,” according to the report.
Published by Debt.com, LLC