The National Foundation for Credit Counseling and Money just released their 2008 Financial Literacy Survey. Here are some stats about Latino Americans as found in this survey.<
Twenty-eight percent, or roughly 6.6 million Latinos, admit to struggling to pay their bills each month, sometimes skipping monthly payments, having accounts in collections or seriously considering filing for bankruptcy.
For most households, housing costs comprise the single largest monthly expense. Roughly 1.7 million Latinos reported that they either paid their mortgage late or totally missed a payment in the last 12 months, putting their most important investment at risk.
Twenty-one percent of Latinos admit to having no idea what they spend their money on. That’s roughly 5 million people who are ignoring a basic step to financial freedom.
Particularly frightening is the fact that 58 percent, or roughly 13 million, among the Latino population report no savings beyond that which is earmarked for retirement. These people are one emergency away from financial disaster.
Further, 37 percent, which calculates to almost 9 million Latinos, have nothing saved for retirement. Combining these two numbers reveals that several million Latino adults are living on financial thin ice, unprepared for the inevitable emergency or retirement.
Insurance coverage can substantially reduce financial risk. Consequently, having adequate coverage is a key component of maintaining good financial health. Thirty five percent, or more than 8 million, have no medical insurance.
Fifty-nine percent lack homeowners insurance.
Eight four percent have no renters insurance.
Sixty-two percent do not have life insurance. That’s roughly 14.7 million who will potentially leave their families in financial distress upon their death.
Credit can be a double-edged sword, working for you or against you depending on the choices you make. Even though you can pay cash for many purchases, most will need a positive credit report when it comes time to buy a house or a car.
The survey found in the Latino community:
Forty percent state that they have no credit card. This means that close to 9.5 million people have no access to credit for an immediate purchase.Only 32 percent of Latinos have ordered their credit report, despite being able to get it for free at wwwannualcreditreport.com.
Although there is no single credit score used by all lenders, it is generally felt that a score over 700 allows the borrower the best available rates. Thirty-two percent of Latinos reported a score under 700. This subjects roughly 7.5 million adults to paying a higher interest rate and potentially restricts their borrowing power.
Seventy nine percent, or roughly 18.8 million Latino adults, report that they have never received professional advice about financial issues. But the NFCC says help is available. “With both English and Spanish speaking counselors, the NFCC stands ready to assist anyone who reaches out for financial help. Additionally, counseling is either free or low cost, with all fees being waived in the case of hardship. We try to remove any barrier between the consumer and financial literacy,” said Gail Cunningham, spokesperson for the NFCC. The survey was conducted by Princeton Survey Research Associates March 5-15 this year and included 1,001 adults. For more information visit www.NFCC.org.
June 5, 2008