SAVINGS

“Hispanic families are among the least prepared for a financial emergency, with 27% having less than 1 month of expenses saved. And only 21% of Latinx families have set aside enough money to cover more than 6 months of expenses”

KEY TAKEAWAYS:

• Saving money for the future is important to achieve some financial security.
• Savings accounts can help you because of the interest you earn on your money. Just make sure you shop around for a good interest rate so you can achieve your goal faster.
• Automatic transfers from your checking to savings account is a good way to build up your savings account without having to even think about it!
• Emergency funds are crucial especially for us immigrants who might have to pay out of pocket for the majority of things.
• Come up with your own personalized savings plan that will work for you and your goals.

Importance:

• Unexpected bills
• Future goals
• Emergencies: This includes things like your car breaking down, someone in your family has a medical crisis, whatever it might be, having a financial cushion can help you weather the storm without endangering your long-term financial health.
  • Immigrants have even more the reason to build up an emergency fund for things like:
    • An Immigration lawyer which is really important whether you plan to hire one to start the process towards citizenship or god forbid you or your family members ever face immigration problems in the future. It’s important to know you have someone in your corner that know the legal system and can help you. There are very few nonprofits that provide you with a free legal presentation which means that only immigrants with thousands of dollars readily available are able to hire a lawyer to represent them.
      • Some even say the Immigrant code is more complicated than the tax code. This is why I can’t stress enough how important it is to have an emergency fund dedicated to a lawyer that knows his way around immigration law. These lawyers are in my opinion crucial because they help you double-check your documents and make sure everything is safe. I know the consequences of an error are high when it comes to us immigrants which is why we have to cover all our bases.
    • Renewing a green card and other legal fees everything with an application has a fee. Every time I renew my DACA application I have to pay 1k for renewal which includes legal fees. Becoming a citizen is not cheap. The amount of money and time is thousands of dollars and a lot of time we’re talking years so It’s extremely important to have money set aside for application renewals and legal fees. The financial expenses are overwhelming.
       

Benefits of a Savings Account

• Stability–  So that you can preserve what you have 
• Growth– The money in your savings account earns you interest 
  • You can set up automatic transfers from your checkings account to your savings account
  • Savings accounts usually offer very low-interest rates, but the growth is safe. Many other investment options run the risk of losing your money or not having any growth
• Safety– It’s in a safe space and as I’ve mentioned before in my bank’s episode you’re money will be insured by most banks up to 250,000
  
  

Where to start?

• Open a savings account
• Pick a percentage of income to save. Experts always recommend having six months of living expenses in an account as an emergency fund. The common tip is 20% of your income should go towards your savings account but I say any percentage is always better than none so you can always start with as little as 1% and work your way up to 20%.  When I enrolled in DACA and learned all the fees I had to start paying I immediately knew I’d be screwed If I didn’t start putting money aside towards legal fees and such. I was working at Thomas Sweets during this time ( an ice cream shop in Princeton, NJ) and I was making okay money but with college books, gas, car payments, food, bills I knew it was gonna be tough to just have 1k on hand that was gonna go towards the renewal of my DACA application. However, I managed to come up with it every time because after cutting back on some things and sorting out my expenses I was able to set aside $100 every time from my paycheck towards savings so I could have that money for legal fees and whatnot. 
  
  

Type of savings account?

Make sure the savings account you open has low or no fees and a high-interest rate and what I mean by that is that because you have a higher interest rate you can earn more on your money and meet your savings goals faster.

Watch out for:

• Minimum-balance requirements
• Restrictions on withdrawals
  
  

QUICK SAVINGS PLAN

1. WHAT IS YOUR GOAL? WHAT ARE YOU SAVING FOR?

Are you saving towards a house? A new car? Or as I’ve mentioned before an emergency fund? It’s important to have your goal in mind because that’s how you come up with your plan and visualize it. 

2. TAKE AN INVENTORY OF YOUR MONTHLY EXPENSES. 

You can write down how much you spend on everything each month. And I mean EVERYTHING. Write down every single thing from rent and things you buy for the house to car payments, gas, and coffees you buy every morning. If you already have a bank account you can download your statements from their website and you can see a report that shows what you’ve spent your money on. I know a lot of banks even categorize them by showing you a pie chart if you’ve been spending the majority of your money eating out or on car expenses etc. It’s really good and you should check if your bank does this. 

3. UNDERSTANDING WHERE YOUR MONEY’S GOING

Once you have a rough understanding of how much you spend monthly, next right down how much money you’re bringing in from your check each month. Subtract your expenses from your monthly income and that’s how you can figure out how much you can set aside towards your savings account/ emergency fund. By doing this you now can see what your money is actually going towards and you can adjust your expenses accordingly. For example, maybe you find you’re spending a lot on fast food throughout the day. You could instead bring snacks with you to avoid spending so much on fast food. Or before going shopping or making an online purchase you could first check to see if you can find any coupons, rebates, or discounts. I recommend coupons.com and there are other websites too and plugins that you might hear a lot about like Honey. You can even get them in the mail, or sometimes you can even simply ask someone working in a store if there are any coupons or current promotions available. I drive my mom to work basically every morning and we always pass by Duncan Donuts to grab a coffee. Well, My dad found some coupons in the mail and cut them out for us and it saved us like $2 every time. By being on the lookout for coupons it can save you tons of money that can instead go towards your savings.

Conclusion

We Hispanics face many challenges in both short and long-term savings. But I can’t stress enough how important it is to be financially prepared for the unexpected, and that goes for anyone. We can’t control the unexpected but we can be prepared if it does happen. We work hard and our families work hard and some even work multiple jobs living paycheck to paycheck. However, we have to take the time to sit down and ask ourselves what would happen if you got sick or injured and you aren’t able to work anymore. Where would you get the money for food, clothing utilities, or mortgage?. Latinx families have the lowest household income among all market segments that are surveyed. With the average credit card debt being $9,650 and average student loan debt is $32,650. Not living paycheck to paycheck is part of the American dream. This is why I’m very adamant about Hispanic families taking the steps to secure their financial future and dreams. The earlier you start the more thankful you’ll be. So open that savings account that’s designated for your emergency fund and add to it every paycheck. Set up an automatic deposit so it’s mindless. Start with what you can and build up from there. 

FUN FACTS

• Currently, the U.S is facing a coin shortage

This is actually because of coronavirus. Since businesses had to close the circulation of coins dropped significantly and the U.S. Mint, which manufactures the nation’s coin supply, also decreased their staffing in response to the pandemic. Now as businesses reopen the demand for coins has exceeded the available supply. 

• When spinning a penny, the chances of landing on tails is 80%.
  Spinning a coin is often believed to be a 50-50 proposition. However, when it comes to the penny, the side with Lincoln’s head is a bit heavier than the flip side. The coin’s center of mass ends up lying more toward heads. Moreover, flipping a coin is not 50-50, but 51-49, biased towards the side that was initially facing up.
• U.S. paper money is not paper. According to the Bureau of Engraving and Printing, the US paper currency is made up of 75% cotton and 25% linen.

In Ben Franklin’s day, people repaired torn bills with a needle and thread. Now clear tape gets the job done for me.