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Why Hispanics are spending more than usual

The pandemic convinced Hispanic-Americans to take their safety seriously – along with financial preparedness.

According to a recent survey conducted by Debt.com en Español, US Latinos and Hispanics are spending more preparing for natural disasters in 2021 than they did in 2020. The reason for the change in financial habits: COVID-19.

The pandemic took everyone by surprise, revealing just how scary life can be when you are not prepared. Now, data finds that Hispanics are spending more than usual to prepare for the unexpected. 

Photo by Anna Shvets from Pexels

Financial preparedness post-COVID

As hurricane season continues and wildfires spread throughout the western US, climate change and natural disasters are on everyone’s minds. Like a global pandemic, natural disasters can be devastating and unpredictable.

Even with warnings, one can never know how bad a disaster might be. This is why preparing and planning ahead is crucial. Both businesses and families should have a plan in place for dealing with natural disasters and the aftermath. 

US Hispanics and Latinos seem to have learned this lesson post-COVID. When Debt.com en Español polled more than 1,000 Hispanic and Latino Americans, 3 in 4 said they were either “spending a little more than usual” or “spending at least double” getting ready for hurricanes, tornadoes, flooding, blizzards, and earthquakes. Only 1 in 4 said they were spending less than before and all said COVID-19 was directly responsible for their extra spending.

financial preparedness

Natural Disaster Survey 2021. (Image source)

“Even during the pandemic, we saw how Americans were changing their spending and saving habits, often for the better,” says Debt.com chairman Howard Dvorkin, CPA. “Now we’re seeing how long that will last. At least in this one area, for this one year, it’s obvious: COVID-19 took such a terrible and sudden toll, no one wants to be caught unprepared again – for anything.”

Additionally, Debt.com en Espanol’s Natural Disaster Survey revealed that most Hispanic-Americans will also be paying more attention to government warnings. The survey showed that 85% said they will take government warnings more seriously and will prepare much better than they have in the past. 

You might be interested: Damaris Diaz shares pandemic stories and how COVID has impacted the Latino community

Decrease in credit card spending

Survey data from Debt.com also revealed another interesting change in the past year: a decrease in credit card spending post-COVID. The pandemic has made people more aware of their spending and more concerned over accumulating debt.

Now, data shows Americans are charging less to their credit cards, and many believe the decrease in credit card spending will continue post-COVID, especially when it comes to approaching natural disasters. 

financial preparedness

Debt.com post-Covid credit card spending survey results. (Image source)

Financial counselor Howard Dvorkin was particularly intrigued by two survey results. First, for those who have been through a natural disaster before, less than 26% needed to use their credit card to pay for their recovery efforts. Yet those who did need their credit card for recovery efforts spent a significant amount: More than 4 in 10 charged over $500 to a credit card. 

“On the one hand, I’m encouraged that many people could get their lives back to normal without charging extra on their credit cards – because it’s a very expensive form of debt,” Dvorkin said. “On the other hand, I worry about those who charged $500 or more. I suspect some of them are still paying that off, since their interest rate could easily top 20 percent.”

As we move forward, post-pandemic it is important to remember the lessons learned. Financial preparedness will ensure families and businesses have the resources needed to recover whenever a disaster may strike. 

ABOUT: Debt.com is the consumer website where people can find help with credit card debt, student loan debt, tax debt, credit repair, bankruptcy, and more. Debt.com works with vetted and certified providers that give the best advice and solutions for consumers ‘when life happens.’

Tapping into Latinas’ potential could unlock $393 billion in economic value in the U.S. 

Did you know that right now Latinas hold the power to unlock $393 billion in economic value in the U.S. and reboot the post-pandemic economy? In fact, some may even say Latina business owners and entrepreneurs have a ‘midas touch.’

The untapped economic value of Latinas in the workplace

According to an article published by Forbes, Latinas have this ‘midas touch’ that could potentially deliver $393 bullion in incremental value to the U.S. economy. Additionally, the most recent State of Latino Entrepreneurship Report conducted by Stanford  Graduate School of Business found that much of the growth among new businesses in recent years has been driven by Latinas. The data from the report revealed that Latinas currently represent 40% of all Latino business owners and the number of Latina-led employer firms has grown 20% within the last five-year period. 

In the same article published by Forbes it was reported that in 2019 alone, Latina entrepreneurs owned 2.3 million businesses and generated $119 billion in revenue. However, despite the tremendous economic power of Latinas, the average size of Latina-owned businesses is much lower than that of others, averaging only $50,900 in annual revenue. Latina businesses have also been disproportionately impacted by the pandemic as data from the Stanford report shows. According to the report, 41% of Latinas have reported experiencing “large negative impacts” due to the pandemic and nearly twice as many Latina-owned businesses experienced pandemic-related closures (30%) compared to Latino- and White Male- owned businesses (16% and 18% respectively). 

Source: 2020 State of Latino Entrepreneurship Report

Latinas also suffer from unfair gender biases in the workplace, especially in the area of wages. The gender wage gap for Latinas is 55 cents per every dollar earned by a White, non-Hispanic man. Furthermore, a 2016 briefing paper from the Institute for Women’s Policy Research found that if current gender wage gap trends continue without any action, it will take over two centuries for the gender wage gap to close for Latinas

Latinas Equal Pay Day, gender wage gap

Latinas are among the most adversely affected by the gender pay gap. They are paid just 55 cents for every dollar earned by white, non-Hispanic men. (Source: latinaequalpay.org)

But this does not have to be the narrative for Latinas. Latinas are strong, powerful, and capable business owners, entrepreneurs, workers, and leaders. If given the opportunities to generate the same level of revenue as white-women-owned businesses, Latina-owned businesses would generate an additional $393 billion in annual revenue–a big boost for Latinas and the U.S. economy as a whole. 

Closing the gap and supporting the Latina market 

To reach this potential and truly unlock the economic value of Latinas, more companies, corporations, and legislative bodies need to take a chance on Latinas. We need to see more Latinas in corporate-level positions. More Latinas in leadership. More funding for Latina-owned businesses. 

Photo by Armand Valendez from Pexels

This past year we have already seen some step up to the plate. Earlier in January, the tech giant Apple appointed the first Latina ever to their Board of Directors. Monica Lozano, president and CEO of College Futures Foundation, was appointed as the eighth board member, bringing with her a broad range of leadership experience, as well as a long track record as a champion for equity, opportunity, and representation.

“Monica has been a true leader and trailblazer in business, media, and an ever-widening circle of philanthropic efforts to realize a more equitable future — in our schools and in the lives of all people,” said Tim Cook, Apple’s CEO. “Her values and breadth of experience will help Apple continue to grow, to innovate, and to be a force for good in the lives of our teams, customers, and communities.”

Giannella Alvarez, Latina board member

Driscoll’s new Latina board member, Giannella Alvarez (Photo: Business Wire)

Even more recently, the major berry company, Driscoll’s, appointed Latinas Giannella Alvarez and Graciela Monteagudo to their board. Both women were praised for their cultural and international knowledge, citing these skills as great assets for the company’s dealings in the global market. 

Speaking on Ginannella’s appointment, J. Miles Reiter, Driscoll’s Chairman and CEO said, “Giannella is a highly creative and decisive leader who has a proven track record of talent building and energizing organizations across countries, customers and channels. Her significant on-the-ground international experiences will serve as an invaluable asset as Driscoll’s continues to grow and adapt to the ever-changing marketplace.” 

Graciela Monteagudo, Latina board member

Driscoll’s new Latina board member, Graciela Monteagudo (Photo: Business Wire)

On Graciela, Reiter shared, “Graciela’s expertise in addressing the Mexican consumer and retail environment will be invaluable to Driscoll’s as we navigate increasing consumer demand in this important growth market. Her experience in consumer brands, especially in the health and nutrition sector, will bolster Driscoll’s capability and success in markets around the globe.”

In the small business sector, GrubHub has been working to support women-led restaurants. Four years ago the company launched RestaurantHER, a platform that connects women-led restaurants and empowers them to bridge the wage gap among women in the restaurant industry. And this year they are expanding and focusing an eye on supporting Latina-led restaurants, Forbes reported

Lastly, on the government level, supporting Latina business owners and entrepreneurs through funding and legislation is crucial to unlocking the economic value of Latinas. Appointing Latinas to government leadership roles is also incredibly important. This past year we have already seen great improvements such as with the appointment of Latina Isabella Casillas Guzman as SBA Administrator and various government programs dedicated to supporting minority-owned businesses. 

You might be interested: Stacie de Armas on breaking stereotypes and advocating for Latinas

President Biden’s American Rescue Plan Act is pivoting to funnel more aid and relief toward minority-owned small businesses that have been impacted by the pandemic. The Act will help small businesses recover post-COVID by providing critical assistance to businesses across the country and delivering $50 billion in aid and relief. 

In New Jersey, the Murphy Administration is working to provide greater opportunities for minority, women, and veteran owned businesses through various key initiatives. These initiatives include a disparity study–the first in 20 years–to identify ways in which the State can contract Minority, Women, and Veteran-Owned Businesses (MWVOB) to provide goods and services. 

“This disparity study is not only long overdue, it is an integral part of our vision for a stronger, fairer, and more resilient, post-COVID economy that opens doors for diverse businesses to play a greater role in shaping our state’s future,” said Governor Phil Murphy. “This study will provide us with an opportunity to create a more equitable business environment, which is a win for us all.”

Other NJ organizations, such as New Jersey Economic Development Authority (NJEDA) and NJ FAM are also providing resources and access to capital for Black and Latina business owners through the development of various funds and programs. 

In a recent Instagram Live, NJEDA CEO Tim Sullivan and digitalundivided CEO Lauren Maillian,  spotlighted the recently-proposed Black and Latino Seed Fund, which the NJEDA intends to create to drive capital to Black- and Latino-owned enterprises. 

A recording of the entire chat can be viewed below. 

 

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With many big name companies and government initiatives taking a chance on Latinas, the future is looking promising. Numbers show that Latinas are an industrious, innovative group, taking the lead in recent years as the fastest growing demographic of small business owners. 

It’s clear that the economic power of Latinas has been overlooked for too long. From small businesses to corporate, Latinas hold tremendous power and abilities. Wherever a Latina goes, she brings with her a special touch, her unique perspective, and a whole lot of passion and drive. And the untapped economic value of Latinas is just what the U.S. economy needs to reboot and recover post-pandemic. The time to take a chance on Latinas is now, and it is long overdue.