In The Community
For Latinos, money is a topic that’s often colored by generational trauma, emotional baggage, and cultural expectations. At a subconscious level, those things create patterns around money that hold us back. The good news is that those patterns aren’t difficult to break and healing your relationship with money is very much possible. Here are 8 tips that will help you get started on that:
Take the time to understand your money history
Photo by Karolina Kaboompics on Pexels
Your family’s history with money can 100% shape your financial mindset, so it’s essential to understand it. Reflect on your upbringing and the messages your Latino parents provided about money. Understanding the narratives you’ve been taught about money is the first step in healing your relationship with money. Acknowledge the past, but understand that you don’t have to carry your parent’s struggles with money or beliefs about it. You can create a new narrative around money and a new mindset.
Educate yourself about money
Photo by Karolina Kaboompics on Pexels
Most people, including Latinos, learn things about money from their families and the people around them. There’s no class in school about personal finances or how to have a healthy relationship with money. You can take your education into your own hands, though. Financial literacy is the best way to get smarter about money and build a better mindset about it. There are plenty of free YouTube videos, books, and podcasts that will help you learn the basics of budgeting, saving, investing, and personal finances. The more you learn, the more confidence you’ll feel about managing your money.
Dream big, start small
When it comes to financial goals, you need to keep things realistic. You can dream as big as you want, but you have to start small. Whether it’s saving for a vacation, paying off debt, getting a car, or investing in your education, breaking down big goals into smaller, manageable steps can make them less overwhelming and more attainable. Nothing you want is out of reach, it’s just a matter of living within your means and making financial plans you can stick to.
Embrace a growth mindset
Believing that you can change your financial situation is essential. If you don’t believe you can, you won’t; that’s how a fixed mindset works. Instead of sticking with that, we encourage you to develop and embrace a growth mindset that allows you to see challenges as opportunities to learn and grow. Remember, your financial habits are not set in stone. If something’s not working for you, you can change it and develop healthier money habits. Doing that is how you start to heal your relationship with money.
Create a financial plan for yourself
Photo by Karolina Kaboompics on Pexels
Creating a financial plan doesn’t have to be complicated and crazy. It’s just creating a budget and sticking to it. To do that, you need to track your income and your expenses to see where your money is going. It’s good to do this for a couple of months so you can identify areas where you can cut back, like shopping, to have more money for your financial goals. Your financial plan needs to align with those goals, so make sure they’re specific. Whether you just want to build an emergency fund, save for one thing or another, or invest, you need your budget to support that and help you achieve it.
Practice mindful spending
One thing many Latinos do, especially if they’ve always been discouraged from spending because “money doesn’t grow on trees,” is spend more than they have. Instead of being scared of spending, they go the other route and spend without thought. Both extremes are wrong, but when it comes to spending in particular, it’s important to be mindful. It’s very easy to make impulsive purchases because everything’s available online and we’re constantly being asked to buy, buy, buy. You have to keep yourself in check, though. Before you buy anything, pause and ask yourself if it’s taking you closer or farther from your goals. This is how you can above impulse buying and make conscious choices about money.
Ask for help!
Photo by Marcus Aurelius on Pexels
Understanding personal finances and what works for you isn’t always something you can do on your own. Sometimes, you need the guidance and support of someone who already got the hang of it and overcame their generational trauma. That’s where financial advisors and financial coaches can come in handy. They will help you create financial plans, find solutions for any current financial issues, and make informed decisions about investments and more. They can also help you build better financial habits and address the generational trauma holding you back.
Review and adjust regularly
Photo by Tima Miroshnichenko on Pexels
Your financial plan is not set in stone! As you make progress on your goals, you’ll need to review and adjust it. Tracking your income, expenses, savings, and more isn’t something you do once and be done with it. It needs to become a part of your routine because it’s how you will stay on track. It’s not about obsessing over money, it’s just about having a clear picture of your financial circumstances, your priorities, and what you’re doing about healing your relationship with money. Remember, money is a tool to live your life, not a source of limitations.
- These 5 Latinas Are Helping Latinos Tackle the Wealth Gap ›
- Are Latina Women's Financial Struggles a Result of Generational Trauma? ›
- Generational Trauma in Latina Finances ›
Money and Latina women? It's about way more than just bank accounts and budgets. We're talking about a whole history of being pushed to the side, burdens passed down through generations, and all the ways things can be unfair depending on who you are. It's not just what happens to you today, but what your family went through before you. That can lead to a very complicated relationship with money due to generational trauma, which means you’re not as smart with it as you could be. The good news is there’s always room for learning! Here are 8 easy things you can do to become smarter with your money:
Automate as much as possible
We probably don’t have to even tell you this, but financial management can get very chaotic. That’s why not having a plan can lead to more issues than not. One easy thing you can do to help you stay on track with recurring bill payments, savings, and loan repayments is to automate as much as possible. The less you have to manually do yourself, the better you’ll be able to stick to a plan and a budget.
Consider making smart investments
While savings accounts are low-risk, they often don't keep up with inflation. Investing can potentially grow your money over time and that’s one of the most important things to do. It’s essential to educate yourself on the investment options available to you and understand the risks before you jump into it. Consulting with a financial advisor will always be a good move. Also, there are plenty of Latina financial advisors in the game who can understand your perspective better, so they’re worth looking into.
Save unexpected cash that falls into your lap
Got a tax refund, inheritance, or birthday money from your abuelita? Instead of spending it right away, consider saving or investing it, or using it to pay down debt. Even 10 extra dollars here and there can make a difference in your long-term goals, so fight the temptation to spend it on short-term whims if you can’t afford it.
Focus on paying off high-interest debt first
Photo by Tima Miroshnichenko on Pexels
If you're managing multiple debts, always prioritize the one with the highest interest rate. Make minimum payments on your other debts and channel extra funds towards the high-interest debt. Once it’s paid off, move to the next highest debt you have, and so on. This strategy minimizes overall interest payments and it can also make you feel very accomplished. It’s nearly impossible to pay all your debt at once, so taking it one thing at a time will do wonders for your sanity.
Track your spending
Expenses tracking is one of the most overlooked things on the road to becoming smarter with your money. This is a very simple thing to do and it’s essential because it will allow you to assess how you’re spending your money. Seeing exactly where your paycheck goes can reveal patterns that you can improve on. Not to mention it will show you what expenses need to be cut down or cut off if you ever hope to make any headway with your finances.
Constantly educate yourself
Photo by Andrea Piacquadio on Pexels
Finance will only get easier as long as you commit to understanding more and more of it every day. There are endless resources at your fingertips and most of them are free on the internet. There’s no excuse to learn basic financial concepts, explore strategies, and stay informed about the financial options available to you. The more you educate yourself, the less intimidating your financial decisions will be.
Create a budget and stick to it
Photo by Karolina Kaboompics on Pexels
If you don’t set a budget for yourself, what are you doing? It’s an essential step to financial success and you simply can’t go on without one. Budgets are fairly easy to create, you just have to keep track of your income and expenses. Your expenses should be categorized into essentials like rent and groceries, and non-essentials like eating out and entertainment. There are many budgeting apps and even Excel templates you can use for this, but you have to stick to it.
Set clear financial goals for yourself
Photo by Pavel Danilyuk on Pexels
Whether it's buying a home, starting a business, or building an emergency fund, having clear financial goals helps you stay focused. Break down these goals into smaller, manageable steps and set deadlines to keep yourself accountable. Having clear, meaningful goals makes it easier to stick to your budget. Whether you're saving for a vacation, a house, retirement, or even a personal treat like a new tattoo or a special edition book, knowing what you’re working towards can help you resist impulsive spending and keep your head in the game.
The financial narrative of Latina women is more than just a story of numbers and economic data. It's deeply intertwined with histories of marginalization, inherited wounds, and the complexities of intersectionality. For Latina women, their financial experiences and challenges do not only pertain to their personal choices or immediate environments; it also carries the weight of generational money trauma.
Can the struggles of our immediate family shape our own relationship with money?
Women of color, particularly Latinas, have a distinctly unique relationship with money and finances. If persistent challenge was involved, this bond can inextricably be linked to a trauma response, one that has been woven into the fabric of their identities over generations. This isn't just about struggling to make ends meet; it's about living with the shadows of a past fraught with financial hardships.
These women don't just grapple with the present financial realities; they also bear the weight of the collective experiences of their ancestors — stories of deprivation, struggle, and relentless pursuit of better opportunities. Generations of living in low-income circumstances, facing barriers to quality education, and having limited pathways to homeownership have left a deep-rooted legacy of financial anxiety.
Many Latinas, whether first-generation immigrants themselves or descendants of immigrants, deal with an added layer of challenges. Language barriers, unfamiliarity with a new country's financial systems, and a pervasive fear of being perceived as 'other' create additional hurdles. These obstacles aren’t just about assimilating into a new culture but also about navigating the socioeconomic disparities often accompanying immigrant status.
Embracing leadership while battling wage gaps
Nevertheless, as societal structures shift and evolve, more Latina women are stepping up as the primary earners for their families. The increasing prevalence of Latina ‘breadwinners’ underscores the critical role they play in their families' financial well-being. Yet, with this newfound responsibility comes the shadow of the Latina wage gap, an unjust discrepancy in earnings that highlights the racial and gender inequalities deeply rooted in the job market.
Latina women earn significantly less than their white male counterparts and even less when compared to women of other racial backgrounds. This wage gap is a testament to the systemic disparities in the workforce and adds to the financial pressures Latina women can feel.
Navigating professional spaces as a Latina woman often means confronting the wage gap and a range of challenges that impact mental and emotional well-being. Imposter syndrome, the persistent feeling that one doesn't belong or is undeserving despite evident success, is a common phenomenon among Latina professionals. This internalized self-doubt and external prejudices can lead to toxic work dynamics, further exacerbating the stress associated with financial responsibilities.How can we take steps towards better financial habits?
Understanding the money struggles many Latina women have faced over generations is the first step. So, what can we do to feel better about our finances?
First, learning essential financial skills can make a big difference. Simple classes or online tutorials about budgeting and saving can help. It's also good to break the stigma around discussing personal finances and talk about money with friends or join groups where people share their financial wins and challenges. Finding a mentor, someone who's been there and can give advice can be a game-changer.
Another big step towards a brighter financial future is championing fairness in pay. When everyone gets paid fairly for their work, we all benefit. So, how can we make this happen? First, staying in the know is key. By understanding what people with skills like ours earn, we can better advocate for our worth. Voting plays a part, too, supporting those who fight for Latina equal pay in the political arena.
The Latina wage gap isn't just about numbers; it's rooted in deeper issues like discrimination, limited educational chances, and racial biases. This isn't a simple fix, but by supporting groups that push for equal pay and using social media to shine a light on these challenges, we can make a difference. It might feel like an uphill battle at times, but step by step, we can turn financial stress into a sense of empowerment and control.
- How to Plan When You Are Your Parents’ Retirement Plan ›
- 5 Mujeres Teaching Latinas About Personal Finance ›
- The Changing Dynamics of Latino Culture Across Generations - Luz Media ›