How To Improve Financial Wellness in the Latinx Community

F.Inancial wellness has become a much sought after (dare I say trendy) term in recent years. At its core, financial wellbeing is a key metric that determines the ability to live a healthy financial life – savings to get you out of an unexpected hardship, a comfortable monthly income so you don’t live from paycheck to paycheck; and even a nest egg for your retirement. But with race and ethnicity into account, it becomes clear that while financial wellbeing is achievable, there are different starting lines based on your identity.

According to the FDIC’s National Survey of Unbanked and Underbanked Households Report, approximately 63 million Americans are either bankrupt, which means they do not have access to a traditional bank account, or bank accounts, which means they have a bank account but alternatives to Non-banks use such as payday lenders or check cashiers. That’s about 18.5 percent of the country, but when you break that down into ethnic groups, it’s even more.

Of the nearly 61 million Latinxs living in the United States, 30 percent of low-income Latinx households have no bank accounts, and similarly 30 percent have no bank accounts – and nearly 50 percent of black low-income households have none or none Bank details. Although Latinx is often used as a racial category, it is a pan-ethnic group made up of a range of racial identities that, if further analyzed, could affect the total. However, what is clear, even at this macro level, is how bias and discrimination further fuel the racial wealth gap and affect the financial development of blacks and browns.

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“When we think about the concept of social justice and justice in this country, our last human right that has not really been fulfilled is justice in relation to economic justice,” said Ramona Ortega, Founder and CEO of My Money My Future. “This country has made a lot of money from our work, and we have not benefited from that work; the consequence of this is the racial wealth gap. “

Ortega, whose company focuses on closing the racial and gender pay gap, stresses that there are a number of structural and systemic factors that affect historically marginalized communities. And Ana Trevino, Head of Community Financial Wellness at the banking collective Tend, agrees and names several barriers such as the lack of culturally relevant services, the lack of bank branches in predominantly black, brown and low-income neighborhoods, language and generational barriers, identification requirements and high interest rates Loans and fees as key factors that help Latinx individuals have no or no bank details.

“For the population with and without bank details, it is almost impossible to find the necessary resources to pursue their financial goals,” said Trevino. Like Ortega, she recognizes that lack of access leads to complicated problems. “It costs a lot of money not to have a lot of money,” she adds.

Even more: Since health is holistic, physical, mental and emotional wellness problems are closely linked to financial worries. The American Psychological Association (APA) reports that 72 percent of adults feel stressed about money, which affects their overall health. Meanwhile, a poll conducted by National Public Radio found that 72 percent of Latinx households across the country reported having serious financial problems, and 46 percent said they had used up all or most of their savings during the pandemic. The same survey found that 25 percent of these households experienced health problems during that time, a by-product of the lack of health insurance. While the pandemic has exacerbated these problems, financial stress has long been linked to chronic health conditions such as anxiety, depression, high blood pressure, and a weakened immune system.

One possible solution to removing barriers to the financial wellbeing of black and brown communities is to bypass traditional banking and financial systems. For example, Trevino is confident that digital banking apps like Tend could help improve the proverbial playing field for those with and without bank accounts by “providing financial services to underserved communities that save, spend, give, borrow, and take over Control over your money, ”she believes. “As we make progress toward our goals, we will have the satisfaction of knowing that we are in an active process of awareness and choices for healthy and fulfilling lives.”

From there, wealth building becomes easier, and that is the ultimate goal, according to Ortega, whose forthcoming book No Shame in the Money Game focuses on helping marginalized people do just that. She believes there are several strategies to achieve this, more precisely five pillars of building intergenerational wealth: organizing your financial life; Evaluation of your budget (following a 50/20/30 budget rule); Invest in a Roth IRA, your 401k, or both; Maintaining your credit history; and finally invest in real estate.

These financial goals may seem a long way off – especially if your starting line was behind others – but setting them and working slowly to address them one by one will bring them closer than doing nothing at all.

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