Financial illiteracy and insecurity is highest among Latinos than any other group despite a majority claiming otherwise according to a new study by TIAA-CREF Institute and the Global Financial Literacy Excellence Center. While 76% of Latinos claimed to have a high degree of knowledge regarding finances, the study, titled “Hispanic Personal Finances: Financial Literacy and Decision-making Among College-Educated Hispanics,” found that only 32% of college-educated Latinos could demonstrate literacy in basic financial concepts.
“It is crucial that we understand the challenges Hispanic families face financially as their share of and impact on the economy increases,” said Stephanie Bell-Rose, Senior Managing Director and Head of the TIAA-CREF Institute.
The study should serve as a wake-up call for the Latino community. As a group, Latinos are less likely to seek financial advice and 56% of Latinos surveyed have failed to plan for retirement and the figures show that Latinos participate in risky financial decisions at a higher rate including high credit use, payday loans and high cost borrowing methods.
With financial literacy key to successful participation in the economy, the study, while troubling, points out key areas such as investing and savings strategies where Latinos can begin to gain a deeper understanding in order to fully leverage their growing financial clout.
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