Financial education is key to success 🔑
Financial literacy is a key factor in the success of any community. This is especially true for Latinx individuals who may have additional barriers in place preventing this education. According to the US Census, the Latinx community is the fastest-growing population segment in the country, and they play an important role in the overall progress of the US economy.
For this reason, we wanted to break down some of the barriers facing this community and close the culture gap between Latinx families and money.
Remember to focus on your long-term goals 🏃♀️
Having grown up in a tight-knit Latinx household, I understand the importance of family within our culture. This has a huge influence on the money management decisions we make. For example, the cultural importance of family leads many of us to live in multigenerational households, and some feel compelled to provide financial support to parents and grandparents.
Hardworking Latinx individuals may lose focus on their own long-term goals, like saving for retirement, and instead use their funds to provide support to their family. Although supporting family is important, be sure to set aside a small percentage of your income for retirement. You want the best for your kids, so make sure they are free to thrive and pursue their own goals vs. having to take care of you later in life.
Debt is taboo in the Latinx culture 💰
For many Latinx individuals, debt is a four-letter word not mentioned at the dinner table. In fact, a study done by Prudential Research found that 62% of Latinx participants didn't think there was such a thing as “good debt.” In reality, good debt does exist, and it’s an investment that will generate income in your future.
Taking out student loans to pay off college is an example of good debt because it helps you secure a better salary in the future. Taking out a mortgage to purchase a home is also considered good debt because mortgage interest rates are usually low, and ideally, your home will increase in value. It’s important not to think of all debt as a bad thing; it can actually be used as a tool to help reach your long-term goals.
Language is not a barrier to financial literacy 🤬
The same survey done by Prudential Research also found that language wasn’t the biggest barrier to financial education for the Latinx community. Instead, many Latinx individuals listed a lack of trust for financial institutions and a lack of understanding of different financial products and services as top barriers.
Half of the participants who primarily spoke Spanish at home did prefer some Spanish-language informational materials. Check out some of our Spanish-language blogs to learn more about money management, or pass them along to family. Coming soon.
Fintech may be the answer 📱
For those who do have trust issues with big banks, fintech companies may be the answer. MoneyLion was founded on the belief that millions of hardworking people have been treated horribly by traditional financial institutions and deserve an affordable way to get ahead. We created products and services to make the American dream possible.
MoneyLion Plus provides you with anytime access to 5.99% APR loans, a managed investment account, $1/day cashback, and (coming soon) zero-fee checking.* Download the app (online | mobile) today to scroll through daily tips on how to better manage your finances.
*Checking accounts will be offered through a third-party partner bank, Member FDIC.
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