Everything my Latinx culture taught me about money was wrong
Time to press on mi gente (my people), here’s how I did it.
If you’re reading this and you’re Latino, welcome. If you’re not Latino, thank you.
If you’re Latino and landed here it means you’re curious how your culture has cost you thousands in saving for your future. If you’re not Latino, it means you care enough about those who are, want to become educated and help bridge the wealth gap.
I am Puerto Rican but I’m not ‘Boricua’. The difference? Boricua identifies someone from the birth land known as “Borinquen” or Puerto Rico, as opposed to being Puerto Rican born elsewhere. Translation: you’re one of us but you’re not ONE OF US. It’s important for me to call out this type of intercultural division because it segregates while destroying community and relationship building. Relationships that can help share the very info I’m about to provide about becoming smarter financially.
So, with that said, let’s jump into the four things my culture taught me about money that was wrong.
#1: Don’t listen to anyone who isn’t EXACTLY like you.
The deck is already stacked against us. Don’t make it worse by buying into something as silly as ‘I was born in Puerto Rico and you weren’t so that makes me MORE Puerto Rican than you’. Or, “I am from Mexico and you are from the U.S., you can’t possibly understand my struggle”. This thinking will cause you to shut out the rest of the info I’m about to tell you.
But I mean, I get it. Like many Latinos reading this, I too grew up in a household where you were taught to only trust your family, exclude anyone else who isn’t, and that being rich is for white people. Even though our culture has its challenges I very much love the culture, the food, the music, the language, and the traditions! But I also think it’s important to highlight how our culture limits us in advancing financially.
#2: Budgeting is not optional.
Money in a Latinx household is a tool for survival; to put food on the table first and foremost. The rest goes to family members who need it, and if you’re lucky you’ll have a little left over to look suavacito (smooth, slick, fly, fresh, etc.). Latinx culture prides itself on ‘flash’ being the thing you do to showcase your wealth. Whether Latinos think so or not, this is a form of budgeting, much of which causes us to spiral into debt and be more susceptible to predatory lending. To combat this, I recommend checking into the 50/30/20 budgeting rule of thumb (Spanish-Version). Also, here’s the English-Version of the 50/30/20 rule.
Many Latinos also live paycheck-to-paycheck, making it almost impossible to budget appropriately. I currently work for an amazing tech startup called Gusto. Gusto is a modern, online people platform that helps small businesses take care of their teams. On top of full-service payroll, Gusto offers health insurance, 401(k)s, expert HR, and team management tools. If you work for a small business who uses Gusto you can take part in what’s called Gusto CashOut. Gusto CashOut gives employees access to money between paydays. It’s repaid automatically from their paycheck. No fees. No interest. This tool, and tools like it, when used correctly can greatly aid in your ability to get on-track financially.
#3: Never trust financial institutions.
We as Latinos grew up to not trust financial institutions. Why? Because it’s engrained in our culture that banks are unsafe and investing in the stock market is like gambling at a casino, just not as much fun. Many Latinos don’t understand that the U.S. banking system actually has protections for their money like a deposit insurance system. It probably goes without saying that there aren’t enough people in the industry that speak Spanish or are at least willing to put themselves out there and use a translation app. And that makes it hard on Latinos. If we can’t even talk to you and you make no effort to try, you’re definitely not getting our money.
But that’s where you’re wrong mi gente. You don’t NEED a physical/emotional connection with a person to understand personal finances & become financially literate. One way I did it was using tools like Napkin Finance (Spanish Version). Of course for my readers who don’t know Spanish, Napkin Finance has an English language site as well. Napkin Finance is one of the easiest ways to understand personal finances. But, if you don’t believe me, guess you’re just gonna have to trust me ;).
#4: You’ll never be rich.
Being rich means different things to different people. For the purposes of this article, rich to me is being able to provide for yourself adequately after you are done working full time. So, with that, I’d like to tell you about compound interest. Albert Einstein once called it “one of the most powerful forces in nature”. It is explained very well by Napkin Finance yet again (Spanish-explanation)/(English-explanation).
This concept CHANGED MY LIFE. In short, it’s how the money you save/invest over time earns interest and increases (or compounds), which also means your interest earns interest. Check out the graph below!
See, it’s possible! In this graph your $100 initial investment, without adding a single penny afterwards, assuming a growth rate is 50% (this is unrealistic FYI — an average growth rate return on investment is more like 7%), turns into $150 after Year 1, and the total sum then continues to grow afterwards, and so on. It all starts with you taking your first step.
So how do you take that first step?
Compound interest has been so influential in my life that I have now made it a part of my life’s purpose. I recently started my own company called Press Play Finance. I’m looking for trailblazers eager to learn personal finances using a fun, simulation-based approach. If you’d like to be the first to test out this pioneering program check us out here to sign up and learn more!
It’s time to press on mi gente, come join me.
