Hispanics are the demographic group most likely (26%) to say they feel “motivated” when thinking about financial planning in today’s environment, according to a survey by Lincoln Financial Group.
The company’s monthly Consumer Sentiment Tracker also noted that the Hispanic population is well-meaning when it comes to financial planning. For them:
• Saving for emergencies is the top financial goal (39%).
• Planning for the future is important (78%).
• The COVID-19 crisis leads them to think differently about their financial future (67%).
From thoughts to action
However, there is a gap when it comes to turning these aspirations into action. Nearly three-quarters (73%) of Hispanic consumers prioritize day-to-day spending over planning for their financial future, and at least half worry about how to pay their mortgage or rent and monthly bills, according to the survey.
Additionally, Hispanics are more worried than the general population about supporting themselves and their families if they were to lose their jobs (61% vs. 50%) and pay off their debts (58% vs. 50%).
“Throughout the past year, we have championed research that allows us to gain valuable insights into specific financial experiences and behaviors within our diverse communities, especially given the impacts of COVID-19” , said Elena French, Senior Vice President, Head of Corporate Marketing, Communications and Brand. “Our latest research shows that Hispanics are engaged in finances, but still face residual challenges from the pandemic. This underscores the need to develop a holistic financial plan, which sets realistic goals and objectives to achieve from a budgeting and savings perspective.
When asked what financial steps they would like to take over the next three months, about a third of Hispanics expressed interest in increasing their emergency savings and creating a debt repayment plan.
“While it is encouraging that Hispanic consumers recognize the value of building their financial security, this is just an important first step in a transformative journey,” said Linda Corujo Ramsey, President of Linda Corujo Retirement. Center based in San Juan, Puerto Rico, and a registered representative of Lincoln Financial Securities. “We want to make sure Hispanics — and all Americans — have access to and harness the tools, knowledge, and education that will drive definitive progress when it comes to prioritizing retirement, protecting families against the unexpected and create the lifestyle they envision for the future.”
Create positive results
For this reason, Corujo Ramsey recommends several tips to help Hispanic consumers create positive financial results:
1. Set a monthly savings goal. Evaluate your monthly expenses against your monthly income, then commit to setting aside a monthly amount that you feel comfortable with.
Also take advantage of financial wellness solutions offered by your employer to help you assess and resolve financial issues you may be facing, such as credit card debt, student loans and retirement savings, and use online calculators and other tools.
2. Prioritize the need to create a financial plan. Feel empowered to take the initiative to review your financial situation and do so frequently, including having conversations with loved ones. Think of a financial plan as a blank canvas where you are the artist creating the final painting. Above all, increase your emergency funds so that you have a financial cushion to lean on during difficult times.
3. Meet a finance professional. Consider meeting with a financial professional who can provide personalized advice that meets your individual needs, and discuss your budget and financial goals with that person to create an overall financial plan.
Ayo Mseka has over 30 years of experience reporting on the financial services industry. She was previously editor of NAIFA’s Advisor Today magazine. Contact her at [email protected]