financial tips hiplatina
Photo: Katie Harp on Unsplash
Lifestyle

10 Best Tips for Financial Planning From These Latina Experts

April is Financial Literacy Month, but in truth there are many of us who may not even know what that term means. Those of us who grew up with parents doing what they could to get by, parents who never dreamed that their children would be able to amass enough money to not have to do the same, those of us who’ve just been putting our heads down and doing the work without thinking about what we would actually do once we had the money, we’re the ones who truly need a crash course in financial literacy, and now is the perfect time to do it.

Beyond showing me how to make change and balance a checkbook, my parents never taught me anything about managing money, setting financial goals or financial planning. Like many first-generation Latinas and Latinas of first generation-parents, there simply wasn’t any money leftover after the bills got paid and the groceries were purchased for my parents to work with, so what were they going to teach me? Financial planning wasn’t in there vocabulary either. Now, I know that means I grew up without financial literacy which according to Investopedia means, “the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.”

I’m grown now though and my mind is set on saving up for retirement, building generational wealth, saving money to use towards my personal goals like traveling the world and buying my forever home, and there are some fantastic tips and tricks on financial planning from Latina financial experts that are gonna help me do it. Keep reading to find out what experts including Katia “Economikat” Chesnok, TKTK have to say to help you increase financial literacy.

Boost Your Financial Literacy

We all know education is key because when we know better, we can do better, so the first step is to boost your financial literacy. HipLatina contributor and founder of Economikat, Katia Chesnok, has some basic tips to help you learn more about money on her Instagram account. She can start with things like simply tracking your income, learning about investing basics, and diversifying your portfolio.

Start Investing

Straight forward, we know. But we are often totally intimidated by the idea of investing that we’re paralyzed from doing anything. However, investing is a major way to build wealth and secure finances for your future. Don’t put it off any longer and start small so you can dip your toes in before totally diving into this new world. Every day that you wait to start, could be less money in your pocket down the line. Use Kat’s tips to start investing and don’t hesitate to learn the basics.

Pay Off High-Interest Debt

For a lot of us, those high-interest credit cards we used to build our credit scores are just causing us more trouble at a certain point. Kara Pérez, founder of Bravely Go, says one of the first money moves we should be making is eliminating high-interest debt, which will free up money in our budgets, decrease our debt-to-income ratios and eventually help improve our credit scores.

Don’t Rely on Long-Term Savings Accounts

Kara also warns against relying on long-term savings accounts for building wealth. She says that because of inflation, most people who leave their cash in a savings account will end up losing money. Instead, she says we we should be investing our assets and reserving cash in savings as an emergency fund, so that we can actually grow our money.

Consider Passive Income

Financial influencer Jannese Torres-Rodriguez says we can all be making our money work for us. By putting in an initial financial investment or investment of time, we can make money without actively working to earn it. Some of her ideas including writing e-books and digital downloads, investing in real estate, affiliate marketing, and investing in the stock market. 

 

Understand Your 401(k)

A lot of us get jobs after college and start saving for retirement for the first time only because of our employer-sponsored 401(k)s, but rarely do we understand exactly what it is from the outset. Jannese highlights the importance of not just understanding what a 401(k) is, but also understanding exactly what a specific employer is offering and how to make the most of it.

Build Your Emergency Fund

Having an emergency fund is what keeps us from having to dip into money we’ve planned to use elsewhere when something unexpected happens, whether it’s a totaled car or losing your job. Financial coach, Cindy Zuniga-Sanchez, says to be sure you’re putting money aside for an emergency fund by figuring out what you’re spending on that you could be allocating towards an emergency fund instead.

Put Your Money in the Right Places

Cindy also suggests that everyone should have three basic bank accounts. Knowing what each account is for will help keep you from spending money that you need for something else. She says we should all start with a checking account and two high-yield savings accounts, one for your emergency fund and another for  one-off purchases like gifts, cars, vacations, etc.

Leave Those Investment Accounts Alone

Money coach Delyanne Barros warns against dipping into your investment accounts to clear debt or for emergencies. It takes a long time to grow investment accounts and there are often penalties and taxes that need to be paid if you withdraw from them early, which means you could end up losing a ton of money and causing an even bigger problem in the future. Instead, she says to find creative ways to make more money.

Have conversations about money with friends and family

Money doesn’t have to and really shouldn’t be taboo. Talk to your friends and family about it. You never know what finance tips you you might learn and be able to implement into your own financial planning strategy, but also you may spark an interest in those around you. When we surround ourselves with individuals with similar goals, it’s often much easier to achieve those goals, so let’s all get in on this financial literacy thing together.