Hispanic Heritage Month highlights the ways in which Hispanic history and culture is intertwined with that of all Americans. It's also time to reflect on the great economic strides Latinos have made – and the challenges they still face.
Hispanic financial success impacts us all.
Welcome to the Invest In You: Ready. Set. Grow guide to financial literacy and wellness during Hispanic Heritage Month.
Hispanic Heritage Month highlights the many contributions of Latinos to our shared American culture and economy. As the fastest-growing population group, Latinos now comprise 18.7% of the total U.S. population, and are the nation's largest ethnic group, after non-Hispanic white Americans, according to the 2020 Census.
Like many Americans, Latinos have experienced their share of ups and downs during recent years – especially due to the Covid pandemic and recession, which has led to higher unemployment and infection rates than the national average.
Yet, there is much to be hopeful about: Hispanics have the fastest rate of home ownership growth, with 70% of home ownership growth in recent years driven by Latinos. And the growing presence of Latinos in many communities across the country is re-shaping their economic and social fabric.
In this Invest In You: Ready. Set. Grow Hispanic Heritage Month newsletter, we'll take a look at the challenges and successes experienced by the Hispanic community through the pandemic and explore ways to build a stronger financial future.
Thank you for taking part in this celebration of America's diversity and commitment to inclusive financial progress.
Gracias, Janet Alvarez CNBC Contributor and Executive Editor, Wise Bread
Latinos and pandemic personal finance The Latino community was hit particularly hard by the Covid pandemic, suffering higher rates of infection, unemployment, and wage declines than other ethnic groups. Sadly, over 19 months into the pandemic, the unemployment and wage gap persists. As of this year, Hispanic workers are still 70% likelier than their white counterparts to be unemployed. And a whopping 21% of Latinos report having wiped out their emergency savings during the pandemic.
Taking advantage of recovery resources Re-building financially means, in part, being able to take advantage of the many recovery and stimulus programs available to Americans. There, too, however, Hispanics have experienced something of a disadvantage: Hispanic-owned small businesses encountered greater difficulty in obtaining PPP loans; Hispanic individuals were less likely to receive stimulus checks, or the Advance Child Tax Credit.
There is still time, however, to get the stimulus to which you are entitled. The IRS portal for obtaining the Advance Child Tax Credit is open through October. Plus, the IRS has launched a new Spanish-language app and tool to make signing up for the credit even easier. And if you are still awaiting any of the stimulus checks to which you are entitled, the IRS also has English and Spanish-language portals designed to help you track and obtain any missing stimulus monies.
Investing and retirement planning in the Hispanic community Hispanic Americans still face investing and retirement planning challenges. Nearly half of Hispanic respondents to a CNBC/Momentive Invest in You Survey do not own individual stocks, bonds, mutual funds, or ETFs. And Hispanics, more than any other ethnic group surveyed, were likelier to respond that it is more important to help friends and family than to save for retirement, according to data from the Employee Benefit Research Institute.
Bridging the retirement and investing gap can seem intimidating at first, but it doesn't have to be. For Latinos who have concerns regarding language or social equity, consider establishing accounts at a Latino-owned bank or credit union (the FDIC publishes a list of Minority Depository Institutions). Many Latino-owned banks and credit unions can help first-time investors establish individual retirement accounts and obtain first-time mortgages and savings accounts. If your employer offers a 401(k) plan, or similar retirement savings option, begin contributing the minimum required to obtain any employer match. And free tools such as Acorns can help first-time investors to do so automatically using their spare change.
The impact of student loans on young Latinos While a college education can be a tremendous force for Latino upward mobility, the cost of borrowing for a college education disproportionately impacts Black and Hispanic communities. These disparities were only exacerbated during the Covid pandemic and ensuing recession. The federal government temporarily paused interest and payments on federal loans beginning in March 2020, providing a vital lifeline to borrowers impacted by the recession. However, this pause will end in January 2022 and borrowers will be expected to resume payments then.
In anticipation of the resumption of payments, borrowers should take active steps now. First, most borrowers would benefit from enrolling in an income-driven repayment program, such as Income-Based Repayment or Pay As You Earn. If you are unemployed or experienced a reduction of income, being enrolled in such a program allows you to enjoy reduced monthly payments – or even $0 payments, depending upon your income.
Second, update your current income levels if you are enrolled in an income-driven repayment program to ensure that your upcoming payments reflect your current income level. Ensure that your address and contact information is updated. If you haven't already, sign up for autopay to ensure you don't miss any payments when repayment resumes. Finally, now is the time to re-adjust your budget to the reality of resumed payments. Consider putting any savings from the remaining months of payment forbearance into a savings account or fund designed to smooth over any budget fluctuations.
Latino home ownership paints a bright picture of the future Despite some of the challenges faced by Latinos due to the Covid crisis, there are indicators that point to the progress and economic promise enjoyed by the Hispanic community. Most notably, the rate of home ownership growth is strongest among Hispanics, and Latinos are expected to comprise 70% of all new home ownership growth in coming years.
The factors that contribute to this phenomenon: A younger demographic with a higher workforce participation rate; a higher household family formation rate; and increasing incomes and educational attainment, which are likely to continue boosting the growth in Hispanic finances.
Hispanic contributions to the economy benefit all Americans As of 2018, the total economic output of U.S. Latinos was $2.6 trillion, a significant – and increasing – proportion of U.S. GDP. Latinos are younger and have a higher entrepreneurial or business formation rate than other population groups. From the mom-and-pop taco stands to Wall Street, Latinos' contributions impact and reinforce the economy for the benefit of all Americans. As we celebrate Hispanic Heritage Month, we applaud the contributions of Latinos to our shared American destiny. Adelante!
A special town hall with U.S. Secretary of Education Dr. Miguel Cardona  In recognition of Hispanic Heritage Month, CNBC, in collaboration with Telemundo, will present an interactive, multi-platform, digital town hall featuring U.S. Secretary of Education Dr. Miguel Cardona.
Register here.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
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