Over half (59 percent) of college-educated Latinos reported that they had difficulty meeting monthly financial obligations, and over half were also unable to put away savings. Increased levels of educational attainment generally correspond with greater economic opportunities and, potentially, greater financial stability, making these findings concerning.
The TIAA-CREF study echoes what was found in Banking in Color, a report released by NCLR, the National Urban League, and the National Coalition for Asian Pacific American Community Development in 2014. This report was based on a survey of the financial access of low- and moderate-income communities of color in various U.S. cities. When asked where they would turn for funds in the event of a financial emergency, nearly half (42 percent) of all respondents said they did not know where they would acquire the money. Moreover, nearly one in three (31 percent) individuals employed full time said that they had experienced a financial emergency within the previous year.
While the economy is recovering from the Great Recession, clearly for many Americans, especially those in communities of color, that recovery is slow in coming.
One difference in findings between Banking in Color and the TIAA-CREF data was in savings behavior. As noted above, the majority of college educated Latinos in the TIAA-CREF survey did not have savings, and in contrast, almost half of Banking in Color respondents reported that they saved on a monthly basis. This was a positive trend, though most reported that they relied on saving via a traditional savings account, which is a relatively low-interest savings vehicle. Moreover, because so many reported having experienced a financial emergency within the past year, it is unclear whether they could sustain a financial hardship with their household savings.
Shifting demographics in the U.S. make the ability of Latinos to reach financial security a critical issue for public policy to address. Population projections show that the U.S. will become “majority minority” in 2043, less than 30 years from now. The ability of Latinos and other low-income communities to secure their economic footing will greatly impact the strength of our national economy.