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money managing, budget

Hate budgeting? Key money managing habits to thrive in business and life 

Budgeting, budgeting, budgeting! We’ve all heard about the importance of budgeting before, but many still overlook this crucial money managing practice when it comes to their personal and business finances. 

money managing, budget

Key money managing habits to make your personal and business finances thrive. (Photo by Karolina Grabowska from Pexels)

Budgeting can look different depending on the area of focus. Your personal household budget vs your business budget will prioritize different things. However, at the core, there are also many similarities and the mechanics are the same. 

When you create a budget, you are planning your incoming and outgoing expenses. This core practice is the same for both personal and business budgets. 

Businesses and households that thrive know how to manage their money and keep their expenses in check. By implementing these money managing strategies into your life, you too can thrive and prosper in both business and life. 

Creating a personal spending plan

Often, budgeting begins in response to a financial crisis, however, ideally, budgeting is proactive, not reactive. Instead of being about damage control, it can be about monthly progress and strategic financial planning. 

By creating a personal budget, you and your household can better plan your spending and save for future emergencies or unexpected expenses. 

Budgeting also includes planning for major purchases. By creating a plan for purchasing big-ticket items, there is less potential for financial surprise and unexpected costs down the line. 

Entrepreneur, international speaker, best-selling author, licensed CPA, and a Chartered Global Management Accountant, Sharon Lechter shares key budgeting tips on her blog. Below are her tips to establish a solid personal budget, or as she prefers to call it– a personal spending plan. 

A personal budget should include the following steps

    • Establish your objectives (financial, lifestyle, etc.)
    • List all of your income sources (wages, investments, spousal support etc.)
    • Identify and list all expense categories (housing, auto, groceries, etc), broken into fixed vs. variable
    • Assign amounts to each spending category
    • Allocate savings
    • Account for fluctuations or one-time events
    • Track your progress and make adjustments if necessary

Managing your business budget

Business budgeting follows the same basic principles as personal budgeting, with a few additions. An accurate business budget will help you ensure your business has enough revenue to stay in business and continue to grow, while also giving you an in-depth window into how the business is performing and what to anticipate in the future.

money managing, budgeting, personal and business finances

Photo by Tima Miroshnichenko from Pexels.

Again, Sharon shares her expertise, laying out the core components to include in a basic business budget

Your business budget should include the following:

    • Your sales and revenue
    • Fixed costs (such as rent) and variable costs (raw materials that vary in price)
    • Debt service
    • Account for fluctuations or one-time events
    • Track your progress and make adjustments if necessary

One major difference between business and personal budgets is that in a business budget, forecasting is more crucial. For most people, predicting one’s monthly income is usually simple as income is fairly consistent from month to month. However, in a business, one must pay closer attention to their revenue forecast to plan for the months ahead. 

In a previous post on Latinas in Business, financial service and leadership expert Jesse Torres advised that business owners should sit down to thoughtfully estimate expected cash inflows and outflows. 

“Factors that to consider include the sales cycle, terms and discounts provided to customers, industry delinquency rates, and other factors that may affect the timing of incoming cash.

Similarly, it is necessary to estimate expenses and other cash outlays. This includes the timing of the purchase of equipment, raw materials, and supplies. It also includes the schedule for payment of salaries, taxes, and other day-to-day expenses.”

Business owners can utilize financial resources from SCORE, a national nonprofit support group for small business owners. SCORE provides a free budget template that business owners can use to manage their cash flow.

You might be interested: Financial matters are women reluctant to talk about money?

Budgeting for Unexpected Costs

One area where budgeting really pays off is when you are faced with sudden, unexpected costs. Most of the time, even without budgeting, we tend to know what costs to expect month to month in both our personal and business finances. You know you need to cover your rent, gas, utilities for instance and probably have that money set aside. However, will you be prepared for an unexpected expense such as a car repair? 

The SCORE blog offers budgeting resources to anticipate these unexpected costs and allows you to set aside funds to tackle these challenges when they arise. Marketing Content Manager, Lauryn Johnson breaks down the differences for anticipating unexpected costs for both personal and business budgets: 

At home: Those who are prepared will have sudden expenses covered by a portion of their budget, usually money set aside specifically for “incidentals.” Others may cover these expenses with their “rainy-day” fund. Either way, those who budget and save will be more likely to successfully navigate an unexpected expense without going into debt. The less prepared may end up having to charge the unexpected expense on credit cards, loans, or other high risk methods. 

In business: For most business situations, costs should be considered either fixed or variable. Much like your regularly budgeted personal expenses, fixed costs have to be paid regardless of your profitability each month. Variable costs, however, are where you should have a little more flexibility.

Implementing these budgeting money managing practices in both personal and business finances will help you thrive and prosper in all avenues of life. 

finances, savings, budgeting

Tips to improve your financial smarts this National Financial Literacy Month 

April is National Financial Literacy Month and what better way to celebrate than to take this opportunity to review and upgrade your financial smarts.

What is Financial Literacy Month and why is it important? 

Whether you’re just starting out or have been earning your way for quite some time, it’s never too late to learn about saving and improving your financial outlook. Developing a budget and building financial knowledge is the foundation for a brighter future.

Learning about financial literacy is not only for adults either. National Financial Literacy Month places the importance of learning about finances and the tools to learn about them right in the classroom, too. No matter their age, putting the know-how and resources at children’s fingertips will give them the power to make smart decisions now and in the future.

What began with The National Endowment for Financial Education as Youth Financial Literacy Day in 2000 has evolved into a month-long observance supported by the Jump$tart Coalition called National Financial Literacy Month. Both the House and Senate have fully supported National Financial Literacy Month through joint resolutions and the U.S. Department of Education promotes the observance of the month as well. Most recently, President Joe Biden proclaimed April National Financial Capability Month and called upon all Americans to observe the month by understanding barriers to financial well-being, and taking action to build their own financial capability and assist others to do so as well.

You might be interested: Financial matters are women reluctant to talk about money?

finances, budgeting,

Photo by StellrWeb on Unsplash

Tips to improve your financial literacy

  1. Read and inform yourself as much as you can

As the old saying goes, knowledge is power. If you want to take control of you financial literacy the best place to start is at the beginning by hitting the books. Start reading newspapers or magazines that focus on money matters. Check out books and guides for beginners. Financial literacy is a skill, and like any skill it takes time to learn. Treat it like a school subject or a new hobby you want to master and absorb all the knowledge you can about finances and money matters. 

  1. Make a budget and record your spending

If you want to be savvy with money budgeting is key. Having a set budget will help you estimate the amount of income and expenses for a given amount of time. There are many different kinds of budgets so you may have a weekly budget, monthly, or yearly. You could even have all three! Having a budget will help you keep track of your money and expenses and prevent overspending. 

Additionally, to take this a step further, you can record your spending. Get yourself a nice little notebook or make yourself a spreadsheet and use it to keep track of all your outgoing money. Tracking how much you spend and on what will help you identify areas where you may be overspending such as takeout food or online shopping. Once you know your spending habits, you can then make efforts to improve them. 

  1. Develop a savings strategy

After learning your spending habits, you can now start curating a saving strategy that will work best for you and your lifestyle. Having savings is incredibly important, as we have all learned over the past year, because you never know when an emergency or disaster may strike. Since the pandemic hit, thousands have lost jobs and seen huge changes in their financial situations. By creating a set savings strategy you can help ensure that you will always have something to fall back on. 

Use your newfound budgeting skills to create savings funds such as an emergency fund, a fund for a certain goal, or even retirement. After reviewing your fixed expenses in your budget, decide on an amount that you can set aside each month to go toward your savings fund. Once you put it in your savings, forget about it! Over time you’ll be able to accumulate a solid savings fund for your future.

  1. Utilize financial management tools

If you need help getting started with managing your finances, financial management tools are a great addition. There is a wide variety of both free and paid tools in the marketplace that can help you manage your credit cards, checking accounts, savings accounts, and more. Take some time to research different management tools and find one that works for you and your unique needs.

  1. Ask advice from others or talk to a professional 

If you’re feeling overwhelmed about money, seek out the wisdom of others who have already mastered the art of financial literacy. A trusted family member or friend is a great place to start. You can also speak with a financial advisor, whose job it is to help you manage your money safely. An advisor can help you create a financial plan and guide you through many of the steps toward building financial literacy. 

Manifesting financial goals with Valerie Sanchez, co-founder of Divine Asset Management

Valerie Sanchez is the partner and co-founder of Divine Asset Management, a women-owned and led financial services firm which provides the tools and…

entrepreneur empoerment

2019 Entrepreneur Empowerment Lunch announces keynote and celebrity speakers   

The 2019 Entrepreneur Empowerment Lunch will present Founder and Designer of Cenia New York as Celebrity Speaker. Cenia will do a dress giveaway for one lucky attendee. The winner will be announced at the event and will schedule a date to visit the Cenia New York showroom in New York City. 

entrepreneur empowerment lunch

Cenia Paredes, celebrity designer and founder, Cenia New York will be Celebrity Speaker at the 2019 Entrepreneur Empowerment Lunch (Photo courtesy Cenia New York)

The Latinas in Business 2019 Entrepreneur Empowerment Lunch (EEL) is shaping up to be the event of the year for small business owners. The “Beauty, Health, and Wealth: Taking Charge of Our Lives” event, co-hosted by Hudson County Community College (HCCC) and produced by 3L Communiqué, will welcome dynamic speakers and honorees for an opportunity to learn, connect and succeed! The 2019 EEL takes place Thursday, June 13 from 9 am to 2 pm at the college’s Culinary Conference Center, 161 Newkirk St, Jersey City, NJ 08736.

entrepreneur empowerment lunch

First Lady of New Jersey Tammy S. Murphy invited as Keynote Speaker (TBC) for her involvemment in women and children’s health initiatives. (Photo credit: NJ.gov)

First Lady of New Jersey Tammy S. Murphy has been invited as Keynote Speaker (TBC) for her involvement in women and infant’s health initiatives. Speakers also include Celebrity Speaker designer and founder of Cenia New York, Cenia Paredes, as well as a Fireside Chat with actress, TV writer and producer, women’s advocate and creator of StorySharing, Ivana De Maria.

Mayor Wilda Diaz of the City of Perth Amboy will receive a special recognition as a “Small Business Champion” for her distinguished work in building the city’s Business District.

In addition, 16 Latinas will be awarded for exceling at growing their businesses and building community around them.

For additional information and registration: Entrepreneur Empowerment Lunch

 

Raising the bar for women entrepreneurs

“Latinas in Business Inc. is once again raising the bar to discuss the topics that provide entrepreneurs with key tools needed for small business success,” said Susana G Baumann, President and CEO of Latinas in Business Inc.. “This year’s theme is reflective of one of the fastest growing industries in the United States – Wellness- a trillion-dollar market broadly dominated by women entrepreneurs,” she said.

However, not all these businesses provide the financial wellbeing that entrepreneurs deserve for their efforts. Many struggle to get ahead in these highly competitive industries or markets. Some have accomplished certain degree of success but have reached a plateau and need to shake things up to get to the next level.

Most of them want to better their physical, mental or financial well-being and reclaim their natural beauty and vitality, re-establish balance and fulfillment. They want to take charge of their lives and businesses to achieve financial freedom while breaking away from negative stereotypes.

“Once again, the 2019 EEL is an educational and promotional event that continues to attract successful Latinas and other minority women entrepreneurs from different industries. They are invited to speak about their journeys, the obstacles and barriers they overcame, and how they have achieved success. Women in general -and Latinas in particular-need to see and hear from those peers, and believe that they can also succeed,” Baumann said.

For information and registration, click on the image.

Bilingual workshops at the Entrepreneur Empowerment Lunch

Workshops at the 2019 EEL are based on “peer-to-peer” knowledge sharing. Experts in each field are also invited to provide additional information to help build a solid foundation for attendees’ small businesses. This year, in addition to 6 workshops in English, 2 workshops in Spanish have been added.

“We have selected topics like branding, funding, and business strategies that were very popular last year at the Entrepreneur Empowerment Lunch. Other topics include marketing products to major buyers, healthy consumer trends and how technology is disrupting the wellness industry,” Baumann explained.

For additional information and registration: Entrepreneur Empowerment Lunch

Cenia Paredes, Celebrity Speaker at the Entrepreneur Empowerment Lunch announces giveaway
entrepreneur empowerment lunch

One lucky winner will visit the Cenia New York exhibit room to pick up her prize (Photo courtesy Cenia New York)

“We are honored and grateful to have the presence of Cenia Paredes as Celebrity Speaker in this year’s Entrepreneur Empowerment Lunch,” Baumann said. “She caters to the woman who embraces her curves, is sassy, self-secure and wants to look tastefully sexy and radiant no matter what size or body shape. At Latinas in Business, we support women’s self-acceptance and encourage them to stay away from negative stereotypes.”

In 2011, Cenia was chosen among 900 companies as one of the 22 participants of The Workshop At Macy’s, and she was one of 4 vendors chosen to launch her product in selected stores in the June’12. Since then, Cenia has expanded her distribution to specialty stores globally and has expanded her line to include a highly successful denim line with her patent pending Cenia Convi Jean. In the Spring of 2016, Cenia’s debuted on Shopping Life 24 in Russia and HSN in the USA.

In addition to inspiring entrepreneurs and providing advice on getting brands noticed by corporate entities, Paredes will do a dress giveaway for one lucky EEL attendee. The winner will be announced at the event and will schedule a date to visit the Cenia New York showroom in New York City to pick up their prize.

“I’m an entrepreneur who knows all too well what it takes to obtain success as a small business owner,” said Paredes. “I’m honored to be this year’s Celebrity Speaker at the Entrepreneur Empowerment Lunch. After dedicating years to building my brand and expanding my designs, it gives me great pleasure to pass on some of the lessons I’ve learned along the way.”

You might be interested: Erica Torres Pagano from corporate America to Total Fitness Evolution

Join us for an open discussions, interactive panels and peer-to-peer sharing with successful Latinas and other women entrepreneurs who took charge of their lives and their businesses in these very competitive industries, and the companies and organizations that are disrupting the wellness industry with products, services and technology.

Ignite your passion to achieve your ideal beauty, health, and finances. You will gain a clear and deep understanding of what truly motivates you and work toward your own personal and entrepreneurial breakthrough.

For additional information and registration: Entrepreneur Empowerment Lunch

shopping small business

Small Business Saturday a day to support your local Latino small businesses

Despite the disadvantages Latino small businesses face, they have outstripped small business growth’s national rates. However, they encounter barriers that other small business owners and entrepreneurs might find easy to overcome. Frequently, financial education and language barriers drag down Latino small businesses compared to other demographics. Still, “when there’s a will there’s a way,” and nobody believes this truth more than a Latino small business owner.

shopping small business

Despite the disadvantages Hispanic businesses face, they have outstripped small business growth’s national rates. However, they encounter barriers that other small business owners and entrepreneurs might find easy to overcome. Those barriers are related to low levels of education and literacy, especially in the financial literacy arena, lack of English language skills, and difficulties in navigating the financial system in the United States.

When I arrived in this country in 1990, I realized that this society was based on the power of literacy and the written language, a great disadvantage for a number of immigrants who come from countries where literacy is a luxury, or from areas where large indigenous populations speak native languages, many of which do not have a written format. They come from societies based on verbal or oral communication and solidarity networks. It is still a common practice for small businesses to keep their finances in a pen and paper fashion.

Participants at 2016 Internet Marketing Week SBDCNJ - Rutgerts School of Business NJ

Several business courses are offered through SBDC around the country. Here: Sunny Kancherla, Director, NJSBDC E-Business Division at Participants at 2016 Internet Marketing Week SBDCNJ – Rutgers School of Business NJ

Americans are used to a highly functional literate society based on written communication in almost every aspect of their lives: school, media, business, banking, you name it. The rise and imperative use of technology leave many behind. Digital dexterity and knowledge are mandatory in any business environment wanting to compete in the real world.

Most foreign degrees are usually assessed by independent evaluators or academic institutions without certain equivalence. For instance, a six-year professional degree in an area of expertise, common in many Latin American universities, might be compared to an undergraduate degree in the United States.

Professional and entrepreneurial immigrants might have some advantages over their counterpart immigrant workers but only if they master the English language. Even so, they encounter difficulties in starting a new business until they get some degree of acculturation and understanding of the system’s mechanisms.

Being there, doing that

Carlos Quintana, a California community organizer that leads an organization called “Manos Unidos” –yes, this is not a typo- says he works with people from Mexico, Argentina, Peru and other countries who often are wary of applying for a grant, joining a chamber of commerce or volunteering for a city advisory commission because they have experience with corrupt agencies in their native countries.

Many, Quintana says, have the drive to start businesses but don’t understand the rules about taxes, accounting, and payroll. Also, he mentions the digital divide; Latinos are not using computers, which are a primary source of information. His organization, like many others throughout the country, can help them figure out planning and licensing requirements and can connect them with Spanish-speaking accountants and tax preparers.

However, the language divide is still a concern for many Latino business owners who would like to grow their businesses and find out about opportunities in state, federal or the private sector. The tricky part is to find a program designed for learning enough specific English business vocabulary to get by at a reasonable cost.  Specialized packages can go from $1500 and up, just to start. Some universities do offer continuing education short programs such as University of South Florida or Columbia University summer courses. However, these classes are too expensive and more suitable for corporate employees or international business students.

Latino small businesses

CHELSEA, MA – JULY 23: Adult education students listen at Centro Latino in Chelsea, a suburb where the Latino population has boomed. (Photo by David L Ryan/The Boston Globe via Getty Images)

Additional barriers in financial literacy and best practices

A report from the Ninth Federal Reserve District, which includes Minnesota, Montana, North and South Dakota, 26 counties in northwestern Wisconsin and the Upper Peninsula of Michigan, states that although they have seen an impressive growth in their Latino small businesses –among the six states in the Ninth Federal Reserve District, Minnesota had the highest percentage increase in revenues for Hispanic businesses, at 248 percent for the period 2002–2007–, they still lag behind national levels.

“The low average for gross receipts may be partly due to the average size of Hispanic-owned businesses. Many of them are microenterprises, or establishments with zero to just a few paid employees. But there are other factors besides size that keep Hispanic-owned businesses from reaching their potential.” Among others, the report mentioned causes such as having a fear of government and established institutions, a limited understanding of American business processes, and encountering a lack of culturally friendly or linguistically appropriate services at local institutions.

Likewise, they have detected “difficulties understanding and communicating with the state and city structures necessary for opening a business. Examples include the need for a federal and state tax ID, registration forms, and property taxes. Also, many Latino entrepreneurs have limited experience with effective business sustainability practices. Limited knowledge in fields like accounting, commercial bank accounts and credit history poses a major roadblock for businesses that would otherwise be of great contribution to Minnesota’s general economy.”

Unfortunately, I have not found many options other than maybe small initiatives at local community level dealing with these barriers, and I would love to hear from more of them. Latinos are very entrepreneurial; the wealth and employment potential they can bring to their communities should not be underestimated. Moreover, they should be taken as an unbeaten role model to be successful against all odds.

shopping small business

Small Business Saturday: Against the odds, Latino small businesses thrive

Financial education and language barriers drag down Latino small businesses compared to other demographics. Still, “when there’s a will there’s a way,” and nobody believes this truth more than a Latino small business owner.

shopping small business

Despite the disadvantages Hispanic businesses face, they have outstripped small business growth’s national rates. However, they encounter barriers that other small business owners and entrepreneurs might find easy to overcome. Those barriers are related to low levels of education and literacy, especially in the financial literacy arena, lack of English language skills, and difficulties in navigating the financial system in the United States.

When I arrived in this country in 1990, I realized that this society was based on the power of literacy and the written language, a great disadvantage for a number of immigrants who come from countries where literacy is a luxury, or from areas where large indigenous populations speak native languages, many of which do not have a written format. They come from societies based on verbal or oral communication and solidarity networks. It is still a common practice for small businesses to keep their finances in a pen and paper fashion.

Participants at 2016 Internet Marketing Week SBDCNJ - Rutgerts School of Business NJ

Several business courses are offered through SBDC around the country. Here: Sunny Kancherla, Director, NJSBDC E-Business Division at Participants at 2016 Internet Marketing Week SBDCNJ – Rutgers School of Business NJ

Americans are used to a highly functional literate society based on written communication in almost every aspect of their lives: school, media, business, banking, you name it. The rise and imperative use of technology leave many behind. Digital dexterity and knowledge are mandatory in any business environment wanting to compete in the real world.

Most foreign degrees are usually assessed by independent evaluators or academic institutions without certain equivalence. For instance, a six-year professional degree in an area of expertise, common in many Latin American universities, might be compared to an undergraduate degree in the United States.

Professional and entrepreneurial immigrants might have some advantages over their counterpart immigrant workers but only if they master the English language. Even so, they encounter difficulties in starting a new business until they get some degree of acculturation and understanding of the system’s mechanisms.

Being there, doing that

Carlos Quintana, a California community organizer that leads an organization called “Manos Unidos” –yes, this is not a typo- says he works with people from Mexico, Argentina, Peru and other countries who often are wary of applying for a grant, joining a chamber of commerce or volunteering for a city advisory commission because they have experience with corrupt agencies in their native countries.

Many, Quintana says, have the drive to start businesses but don’t understand the rules about taxes, accounting, and payroll. Also, he mentions the digital divide; Latinos are not using computers, which are a primary source of information. His organization, like many others throughout the country, can help them figure out planning and licensing requirements and can connect them with Spanish-speaking accountants and tax preparers.

However, the language divide is still a concern for many Latino business owners who would like to grow their businesses and find out about opportunities in state, federal or the private sector. The tricky part is to find a program designed for learning enough specific English business vocabulary to get by at a reasonable cost.  Specialized packages can go from $1500 and up, just to start. Some universities do offer continuing education short programs such as University of South Florida or Columbia University summer courses. However, these classes are too expensive and more suitable for corporate employees or international business students.

Latino small businesses

CHELSEA, MA – JULY 23: Adult education students listen at Centro Latino in Chelsea, a suburb where the Latino population has boomed. (Photo by David L Ryan/The Boston Globe via Getty Images)

Additional barriers in financial literacy and best practices

A report from the Ninth Federal Reserve District, which includes Minnesota, Montana, North and South Dakota, 26 counties in northwestern Wisconsin and the Upper Peninsula of Michigan, states that although they have seen an impressive growth in their Latino small businesses –among the six states in the Ninth Federal Reserve District, Minnesota had the highest percentage increase in revenues for Hispanic businesses, at 248 percent for the period 2002–2007–, they still lag behind national levels.

“The low average for gross receipts may be partly due to the average size of Hispanic-owned businesses. Many of them are microenterprises, or establishments with zero to just a few paid employees. But there are other factors besides size that keep Hispanic-owned businesses from reaching their potential.” Among others, the report mentioned causes such as having a fear of government and established institutions, a limited understanding of American business processes, and encountering a lack of culturally friendly or linguistically appropriate services at local institutions.

Likewise, they have detected “difficulties understanding and communicating with the state and city structures necessary for opening a business. Examples include the need for a federal and state tax ID, registration forms, and property taxes. Also, many Latino entrepreneurs have limited experience with effective business sustainability practices. Limited knowledge in fields like accounting, commercial bank accounts and credit history poses a major roadblock for businesses that would otherwise be of great contribution to Minnesota’s general economy.”

Unfortunately, I have not found many options other than maybe small initiatives at local community level dealing with these barriers, and I would love to hear from more of them. Latinos are very entrepreneurial; the wealth and employment potential they can bring to their communities should not be underestimated. Moreover, they should be taken as an unbeaten role model to be successful against all odds.

Saving and investing, breaking “the coconut complex”

Louis and Angie Barajas, LAB Financial Solutions

Louis and Angie Barajas, LAB Financial Solutions

Most white Americans trust the financial system to help them build some security for their families. They understand that crucial decisions such as buying a house, sending their children to college and having a decent life in retirement depend on saving and investing all along their working lives.

They are also more prepared to confront critical economic moments they face through no fault of their own, such as the recent economic recession, a study by the Pew Research /Social and Demographic Trends found.

“… The median wealth, or net worth, of U.S. households fell from $96,894 in 2005 to $70,000 in 2009, a drop of 28 percent. The precipitous decline in wealth was not evenly distributed across groups. Minority households—Hispanics, blacks and Asians—experienced far steeper declines than white households,” the study says.

In 2005, the median net worth of white households—$134,992—was the highest while Hispanic households had median net worth of $18,359. Hispanics’ median net worth fell 66 percent to $6,325 while the drop in white households was modest in comparison, falling 16 percent to $113,149 in 2009.

The difference? Most Hispanics net worth is based on their home equity. A number of Latino families fail to build basic financial assets, do not have a net worth to rely on nor are prepared to face these crucial decisions. Homeownership rates are lower among Hispanics, college attendance rates—although increasing—lag behind other groups, their access to health care or other type of insurance is also lower than other populations, and Latinos are more dependent on Social Security benefits than whites or Asians.

The largest minority group projected to reach 25 percent of the U.S. population by 2050, Latinos financial savings and investment habits and their economic vulnerability are a source of concern for federal and state governments as they depend more on public assistance and social programs, and contribute less in taxes through lower skilled, less paying jobs.

Saving and investing ¡Sí se puede!

What are the hurdles and obstacles Latinos face that keep them at the bottom of the food chain?

“In my many years of acting as a financial advisor, I have come to the conclusion that there are cultural values truly hard to overcome for Latinos. However, many of my clients were not rich when they started planning and now they have achieved financial independence,” said Louis Barajas, author of The Latino Journey to Financial Greatness.

Barajas, an acclaimed national author of multiple financial literacy books and sought-after speaker, believes cultural barriers among Latinos that keep them from achieving financial stability include depending on others to care for them—such as providing for their children way into their adult years, the elderly depending on their children or the working family depending on their employer or patron (boss), a figure seen as powerful and wealthy.

Another cultural barrier is to store their money instead of investing it—mostly because they do not trust the financial institutions nor they trust what they don’t “see.”

“Las costumbres (the customs) say that we are a ‘cash’ culture, we budget well, we manage and we even save to send some home, but we still do not understand the power of investing and saving for a safety net or the future. I believe it is an instant gratification versus late gratification mind set,” Barajas said.

“Many do not understand what the pain is going to be like down the road.”

‘I don’t earn enough to save or invest’Maya_angelou_dobetter

When Elena’s oldest daughter entered her junior year in high school, Elena was concerned that she had no room in her budget for her daughter’s college education. At 45, Elena, a single mother raising two teens, was working full-time in a publishing company making around $30,000 a year in gross income, and teaching two nights a week at a community college. Her budget was barely enough to pay rent and bills and buy clothes for the girls. She was also sending a modest amount to help her widowed mother, had no savings, limited health benefits and no life insurance.

She lived paycheck to paycheck.

Two years later, her daughter was accepted to a public university with in-state tuition. Elena applied for financial aid but her income was not enough to qualify for all so her daughter had to apply for additional subsidies and loans.

Elena’s second daughter decided to apply to a community college for two years and then continue in a regular college. Both girls were excellent students and soon received grants and unsubsidized loans.

Elena continued to work and provide for the girls to study but at 52, when the loans started to kick in, Elena found herself in a hole. She was single, with more debt than she could afford, and no savings for her own future.

As many Latino parents, Elena did not understand the value of teaching her daughters to be financially independent because she had not had that education from her parents. Barajas cites in his book comedian George Lopez: “You know why there aren’t any homeless Latinos? Because Latinos never leave home.”

“Even when families don’t make a lot of money, if they understand the value of saving and investing, they can make good financial decisions. Unfortunately, another bad habit in the community is to think that if you are trying to be better or improve yourself, you become a ‘coconut’ (brown in the outside and white in the inside),” the LA financial planner concluded.

(The original version of this article was posted Jan 18, 2013 @Voxxi.com)