Turning Spending into Investment Power for Latinas in America

Latinas have a very unique position in the US when it comes to spending power.

According to Catalyst.org, after the Non-Hispanic Whites, Latinos’ $1.7 trillion spending power exceeds that of African Americans and Asians. And this number is expected to increase.

How are the Latinos using $1.7 trillion a year? Research shows that the top five items of Hispanic household spending are: housing, transportation, food, clothing and shoes, and phone services.

It is clear that Hispanics are trying to live the American dream, sometimes at the cost of their well-being:  their health is at risk due to language and cultural barriers, lack of health insurance and lack of access to medical treatment. In fact, cancer is the first cause of mortality among Hispanics in the US, and obesity rates, which are higher for Latinos than for non-Hispanic whites, are leading causes of heart disease, strokes and diabetes.

Spending money is substantially different than investing money. The question here is, can Hispanic families know how to put that amazing spending power into priorities that can bring them, and the future generations, more happiness, health and productivity? For example, when we look at studies done by Refuel Agency analyzing their top choices for food, which is the third expense in importance for Latinos, we see that they tend to have a preference for some brands lacking important nutrition content, like Coke, Starbucks or McDonald’s.

Investments in health and education are known to be key for breaking cycles of poverty, but it looks like they are not part of the Hispanics´ spending priorities, at least not yet. There are almost 60 million Latinos in this country and according to the Census Bureau, 27.2% of them are living in poverty. If Latinos’ life expectancy is higher than that of other demographic groups, we should see more opportunities for financial literacy out there to support their buying decisions in order to help them put that spending power into wellbeing investments, such as insurance, medical attention and wellness education.

One thing we remember the most about one of our Mexican fathers was his commitment to saving money. While he didn’t receive a formalized education, we learned from him that it was important to buy only what you could afford, with the money you had on hand. In other words, you shouldn’t go into debt, or owe anything to anybody. “My papi kept a ledger of his expenses on a napkin, because his wallet was his bank account, ensuring that every penny was accounted for.” This uncanny wisdom is an exemption to the rule.

Could we imagine the spending and investment power of this population group with a formal education and habits of saving, budgeting, using financial services, fulfilling tax obligations and also giving back to their communities?

As Latinos continue to increase gains in employment and entrepreneurship, the need for increased financial coaching and wellness education is paramount.  Latinos are the fastest and youngest growing demographic and are taking on the burden of raising children while simultaneously taking care of aging parents and even grandparents leading them to consider retirement funding, life and health insurance for the entire family.  Financial coaching is based on the premise that the client is creative, resourceful, whole and the most knowledgeable of their own financial situation. The success of financial coaching has seen families reduce debt, create savings plans and increase healthy spending options.

If Hispanics could at least have more information on how to prioritize their spending and invest their income in order to achieve well-being, they would be a more prosperous and productive community in the US. And if they are going to continue consuming- at least, let’s do our best to help them make conscious choices towards a healthy life.

Amanda Arizola, collaborated on this article with Dr. Olga Hickman, Executive Director of Bachman Lake Together a nonprofit organization working to support children in one of Dallas’s most historically underserved neighborhoods and Aidee Granados, Founder and CEO of Rosa Es Rojo, Inc. Aidee is a graduate of Tecnologico de Monterrey in Mexico. She is certified as Health Coach from the Institute of Integrative Nutrition of New York.

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