Thank goodness for Financial Literacy or I would still be using Condina’s to “Build Wealth”.
One of the things that separate Latinos most from other cultures is how we deal with money.
I love my culture to death, but when it comes to building wealth we are far behind. Our focus has always been on extreme giving, saving, and/or living frugally.
When you live in a country where work is not stable, you are in survival mode 99% of the time. Even when latinos leave their home countries for a more stable income they cannot let go of the fear. The focus is on paying for necessities and taxes but that’s about it. Everything else no matter how beneficial it is for one’s well-being or family is non-essential and is not prioritized. For this reason, Second Generation Americans have not learned how to build wealth when they leave their homes.
I am certain that Third Generation Americans will be the first to build wealth as a whole, while maintaining the giving nature of our culture.
Although they will not have financial literacy skills when they leave home, Second Generation Americans will lead the way. They will have the task of changing their mindset about money in order to transfer that down to the new generation.
Second Generation Americans (children of immigrant parents)
To do this they will have to change their mindset and forget everything that they witnessed growing up at home. Second Generation Americans grew up in homes where their parents constantly said, “no tengo dinero” (I don’t have money). While there was always alcohol in the home, cash was “lent” to family, parties were held for various celebrations. It was confusing, to say the least.
Lending money was never promised to be paid back. But our parents could not say no if they had it readily available. Money was not being funneled into retirement funds or brokerage account investments. It was either kept at home, checking account, or savings account.
Allowances were not something that was practiced in our homes. You would probably get 50 cents after church on Sundays for your churro. If you needed something you asked for it and were probably told that there was no money.
Again, these habits were not to be mean. Our parents did not know any better. Their focus was on providing for our very basic needs. Beyond that, they felt very comfortable saying no. They felt that we were already growing up with a lot more than what they had, which was true.
The results of hearing these messages for Second Generation Americans has been:
- Not knowing how to manage money. We got into high debt fast.
- Young workers. After constantly hearing that there was no money, there was motivation to start working early to be able to pay for your wants. I started working at 13 in a swapmeet selling popcorn. I worked 10 hours a day and made $30 each shift. I have worked ever since.
- Lack Mentality. You don’t feel that you ever had money so you go crazy when you finally get money into your hands. You don’t feel worthy of having money to your name. You don’t know about saving or investing, or that debt is bad.
- Condina. If you want to save, join a Condina. A Condina is when you get a group of people, let’s say 10. Each person gives $100 a month for 10 months (a month for each person). Every month one person gets $1,000. You draw numbers in order to be fair. If you need the money urgently then you can ask to go first or switch numbers with someone else. People use that money to make a big purchase item, get a medical procedure or pay off a debt. It is the most popular way to save money in latino households.
Latinos are ready to build wealth and change their lack mindset to one of abundance and positivity when it comes to money. We are starting to have conversations about money in our communities and taking steps to build wealth for ourselves and future generations.
What will get us there is creating a budget for our households that provides a balance of giving, splurging, and saving/investing. Lastly, we need to ban Condinas from our lives and put our money in high yield savings accounts for short-term financial goals.