Did you know that the percentage of unbanked and underbanked families is higher among the Hispanic community? 21.8% of Hispanic households are unbanked, while 29.3% are underbanked. Statistically speaking, Hispanic families are the least prepared group for unexpected expenses and emergencies, and given the current situation in this country, this leaves these families in a very vulnerable state. (Based on the 2017 FDIC National Report of Unbanked and Underbanked Households)

It has been well documented that as the US becomes more diverse, wealth disparity tends to widen along racially and ethnically divisive lines, often hitting the Hispanic communities hardest. Some of the main drivers of this uneven distribution of wealth can be attributed to a lack of basic financial literacy among many members of the Hispanic community and a lack of awareness of how to access and benefit from the formal financial system.

The lack of accurate information and access to basic financial services in our society is a persistent problem faced by Hispanics. In general, the lack of information on existing services as well as on how to manage one’s resources, deprives Hispanic families of economic opportunities and social mobility, impeding them from reaching the financial stability and security they strive for.

This deficit fuels the cycle of poverty and deprives low-income Hispanic individuals and their families of economic opportunities, prevents them from reaching financial security and stability, puts them at risk of scams, fraud, and financial abuse, and hinders their full integration into US financial system.

That’s why financial education is an opportunity for these families to make a difference between fighting every day to just get by and have the basic knowledge that allows them to plan and make better decisions for the future. Financial education enables the Hispanic community to achieve their financial goals through better financial management and the security of knowing they have the tools to benefit from their hard work in the long run. By teaching families through workshops how to open bank accounts, apply for loans, and protect their finances, they can become more economically stable and strive for a better future.

The Hispanic community in New York is faced with high levels of vulnerability, little knowledge of financial or banking institutions, and without much financial education, suffer a difficult reality: few know how to manage their hard-earned financial resources and they are also faced with a language barrier that makes it difficult to comprehend a formal banking system.

Without reliable information on how to take advantage of the complex financial system, Hispanics often fall prey to fraud and financial abuse and thus resort to an informal financial system, which for the most part, is more insecure, costly, and the disadvantages outweigh their benefits. Their limited English language skills and little understanding of financial instruments such as credit, the formal and informal banking system, among other factors, also hampers their full integration into US financial systems.

Through our financial education program, participants can learn about basic financial management skills, including effective communication with family members, how to develop and maintain a budget, what the difference is between savings and insurance, and how to access credit, among other topics. Participants begin to act on this information, with the objective of improving their personal finances and achieving better opportunities for their families. Our workshops offer a safe space to have open discussions about the societal and economic barriers that often inhibit immigrants from realizing their true potential.

“Financial education helps us to avoid getting in the way of the dreams of our children.” -Participant

Some of the main drivers of this uneven distribution of wealth can be attributed to a lack of basic financial literacy among many Hispanics as well as to a lack of awareness of how to access and benefit from the formal financial system.

Isolated from organizations and institutions that they trust, this deficit fuels the cycle of poverty and deprives low-income Hispanic individuals and their families of economic opportunities, prevents them from reaching financial security and stability, puts them at risk of scams, fraud, and financial abuse, and hinders their full integration into the US financial system.

Qualitas of Life measured the impact across its program through a pre and post-evaluation survey; the outputs of the surveys show the level of readiness in participants and other indicators such as access to credit, banking status, financial goals, debt, among others. The results highlight the following:

-Graduation rate: 69.71% of participants completed the 8-session course successfully by attending six of eight sessions.

-Nationalities: 15 nationalities served, among them are: Mexico 57%, Colombia 11.4%, the Dominican Republic 7.8%, Ecuador 7.6%, Honduras 4%, United States 3.4%, Guatemala 3%, Peru 1.8%, Venezuela 1.6%; among others that represents less than 1% (El Salvador, Puerto Rico, Nicaragua, Bolivia, Argentina, and Uruguay).

-Gender: 86.6% of the participants of the financial education course identify as women. 13.2% identify as men.

-Average age: Average age of participants 38 years old.

-Average # of children per family: Average 2.2 children per family

-Average # of years living in the US: Average 13.5 years living in the US

-% Annual income:

30.88% Less than $6K

22.65% Between $6k and $12k

14.12% Between $12K and $24K

4.71% More than $24K

-% fixed income: 20.59% rely on a fixed monthly income.

-% of participants that do not have access to credit: 43.8% don’t have access to mainstream credit.

-# of people who completed a budget: 9 of 10 participants.

-# of people who established a SMART financial goal: 9 of 10 participants.

-# of people who increased financial knowledge: 8 of 10 participants.

-# of people who increased confidence in managing their finances: 10 of 10 participants.

Most of the participants set a new financial goal.
75% of the participants distinguished between financial needs and financial desires.
Set realistic priorities and limits on your spending.
Learn to calculate the annual rate of a credit.
Manage your debit and credit cards in a more financially responsible way.

WHY FINANCIAL EDUCATION?

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