Every family has stories and lessons that they pass onto the next generation. Sometimes it’s a beloved recipe or the fact that Vick’s VapoRub heals all wounds but rarely, if ever, is it about financial planning. For most Latinx families in the U.S., the latter lessons are hard to come by. The typical white family has eight times the wealth of the typical Black family and five times the wealth of the typical Latinx family, according to the U.S. Federal Reserve. This statistic has remained basically unchanged since 2016.
This isn’t because we’re “bad with money” as we might be led to think. It’s not written in our DNA, there are real structural barriers that we face to building wealth. From lack of access to specific investment accounts, to the generational lessons we do and do not learn at home, the ongoing pandemic is making these issues worse. Being an immigrant or first generation means we’re building wealth from the ground up and learning how to navigate a financial system with zero experience or knowledge.
When we talk about trying to change generational narratives the structural work is important, but the personal side is essential. Generational change can come from what we teach within our own homes that shapes our families future.
I spoke with two Latinas (who asked not to have their full names published) actively working to unlearn their own personal finance narratives in a bold attempt to create change for their future selves and the next generation. Eresma N.who works in IT and lives in Austin, Texas, grew up in a home with no financial guidance. “Growing up money was something that my father handled and asking for money for a school function or anything else was a BIG DEAL. I was always told, ‘do you think we have a money tree growing in the backyard?'” Her background has lit a fire in her to learn about growing her wealth through both real estate and index fund investing.
“No one ever told me in my 20s ‘hey you should be maxing out your 401K or at least try to.’ No one ever explained what an IRA is and that you should be putting X amount away in savings, you should have an emergency fund etc. It was just — get a job, pay your bills, congrats you’re succeeding in life,” Eresma says.
“Now I follow a lot of financial people on social media and am trying to learn as much as I can about index funds. I worked in real estate for years so I learned about how you can build wealth through real estate just by being in the industry.”
Blanca V, who works in education in Round Rock, Texas, has had “to unlearn horrible money habits and try to learn to survive in a white world.”
“I grew up with a different notion of what being humble was about than the mainstream definition, and that you don’t ask for help when it comes to money because that’s personal. My family, especially my father, equated being ‘humble’ with lying low and staying quiet. The belief that if you just did a good job, someone was bound to notice. I have found this to often be true. But it implicitly taught me that networking, talking about my work, showcasing what I do was not okay, that it was arrogant.”
This idea of laying low and doing the work is a common belief among Latinxs and clearly a barrier toward networking and moving up. Now, Blanca is working on changing those narratives for the next chapter of her life and financial journey.
“I am unlearning shame around selling myself and networking for my business and job, and I am also learning to actually talk about money and money troubles. Silence is actually what creates patterns of injustice. For instance, not talking about our pay, when sharing our pay would show gender and racial and ethnic disparities.”
Latinas in the U.S. on average are paid 45 percent less than white men and 30 percent less than white women. We make 55 cents to every dollar a white man makes and this year Latina Equal Pay takes place on Oct. 21 because it takes the average Latina woman, working full-time year-round, 10 extra months to earn what the average white non-Hispanic man earns in one year. Part of changing this is taking it upon ourselves to have these conversations about money and pay to help all of us get ahead and get paid fairly.
“Learning to market myself required that I learn how humility and networking and talking about you and your work do not have to be mutually exclusive. Now, my definition about being humble is geared around the idea that I should know who I truly am — both the amazing things I can do and my limitations.”
For both Eresma and Blanca, their experiences have led them to want more for the next generation of Latinas. Both of them want younger Latinas to know they can stand in their own financial power, without a man in charge of household money or having to rely on anyone else to handle finances for that matter.
“It is imperative [for young women] to understand finances, saving, and how to budget your own money BEFORE getting married,” Eresma says. Men aren’t a part of the financial plan for Blanca either.
“I grew up learning that the male of the home should handle the finances and your role as a wife is not part of any financial decisions. Today, I now have a business where I help organizations organize their thoughts around who they are and where they want to go so that they can also more easily market themselves and say no to things. That’s what I want future Latinas to know; our worth and to share it,” she shares.
Charting a new course for yourself and for future generations requires looking inward at the start; what about your own life do you want to change? What do you need to accomplish that? And then, how can you create this change for your loved ones and the ones yet to come? As we celebrate our heritage this month, we can also celebrate the innovation that we can bring to our culture. We can develop new money narratives and work to grow them. We can change where we’re going, while honoring who we are.