Los Angeles Area Latinos Financially Fit on Immediate Needs
According to Wells Fargo survey, concerns about enough savings for emergencies
and retirement still affect most area Hispanics
A new survey from Wells Fargo (NYSE: WFC) found that Hispanics in the Los Angeles area feel they are in good shape relative to their immediate financial needs, but are less healthy when it comes to their long term financial goals. Only about one in four feel they are in "good/great" financial shape to retire comfortably (28% vs. 33% of all adults nationally), and only 32% say they have enough "rainy day" savings set aside for emergencies (vs. 40% of adults nationally).
Published on LatinoLA: February 26, 2014
These results come from Wells Fargo's financial healthy study, an online survey of Hispanic households in Los Angeles and Orange Counties, conducted by Market Probe, Inc. It was designed to assess Americans' perceptions of their own financial health.
"There are many barriers to financial planning. Many people don't understand how to create a roadmap to improve their financial health. But not spending time today to think about the future can be costly in the long run," said Pedro Marti, financial advisor at Wells Fargo Advisors. "I think of personal finance in the same vein as my health--I wouldn't keep concerns about my physical health private. I'd consult a doctor or talk to a friend or family member about it," he added.
Financial Health and Physical Health
Most local Hispanic residents say they are in good/great financial shape to pay their monthly bills (65%) and 52% feel good/great about their ability to live within their means. However, compared to all L.A. area residents, local Hispanic adults tend to feel slightly less physically and financially healthy overall. Nearly three in five, or 57% of local Hispanic adults describe their physical health as either "good" or "great" (lower than 65% of L.A. area residents), and only 42% of local Hispanics feel in "good/great" financial shape (vs. 49% of L.A. area adults.)
In addition, financial concerns are still top of mind. Many local Hispanics report that financial worries may be affecting their physical health and relationships. Nearly half of local Hispanics (46%) report that money is the biggest stress in their life (slightly higher than 39% of all adults nationwide). Similarly, more than a third (39%) of Hispanics in the L.A. area report feeling more stressed about their financial situation than they did last year.
"When someone is physically out of shape, they typically understand that eating well and exercising more will help get them back on track. With money, however, there's a lack of understanding about the importance of designing a plan. Half of Hispanics in L.A. report having no type of detailed investment or financial plan or even a budget to help manage their spending, which means that they don't have the roadmap needed to improve their financial health," said Marti.
Conversations about Money
Sixty five percent (65%) of local Hispanics report that when growing up, their parents put an emphasis on the importance of saving money. Among those with children of their own, half (52%) report frequently discussing and giving advice about money and finances to their children, but 30% never really discuss finances or share advice with children.
Additionally, one in three local married Hispanics (32%) report having heated discussions with their spouse about money and household finances (slightly more than 24% of all area residents, and 25% nationally).
Financial Health Regrets and Barriers
Compared to the national population, more than twice as many area Hispanic Americans say that they currently provide financial support to their parents, and 23% of Hispanics are currently saving to fund their children's education. Yet, only 30% of local Hispanics with children feel in "good/great" financial shape to cover their children's educational expenses.
Knowing what to do also appears to be a major barrier to a healthier financial life. The top barriers preventing local Hispanic adults from saving more are sticking to a savings strategy over time (35%), and knowing the best way to save or invest (30%), similar to the national response.
Just over half of local Hispanic residents (52%) recognize that they would benefit from a professional financial or investment advisor. Most often, they would consider seeking advice from a professional investment advisor (60%) and over a third (35%) would also consider advice from a retirement plan provider (e.g., 401(k) or IRA provider). About one in four area Hispanics would also seek advice from online financial tools or calculators (27%), an accountant (24%), or their bank or banker (23%). In addition, the vast majority of local Hispanics are interested in having their bank help them monitor their overall financial health (71%, significantly higher than 59% of all U.S. adults).
The study also revealed the following saving and spending-related behaviors:
ÔÇó While most local Hispanics in the past year saw a doctor for a physical check-up (71%) or went to the dentist (68%), only 38% conducted an annual financial review or check-up
ÔÇó Instead, 71% of local area Hispanics were far more likely to make sure to take a vacation in the past year
Visiting a professional is a great first step to getting fiscally fit. Wells Fargo also offers online resources for creating a financial plan and saving for retirement. For more information, please call 1-800-869-3557 or visit your local Wells Fargo store.
About the Study
These survey findings are based on an online survey conducted November 13 ÔÇô November 30, 2013 among adults nationwide (N=1,004) and L.A. area residents overall (n=300 in Los Angeles and Orange counties), and between December 9, 2013 and January 8, 2014 among Hispanic households in the Los Angeles area (n=292 in Los Angeles and Orange counties). Qualified respondents were non-students, ages 25-75, who are the primary or joint financial decision-maker in the household with household investable assets of at least $10,000. Survey results are weighted to reflect Census data for gender, age, and household income to ensure representativeness (and national results were also weighted by region and race/ethnicity). Assuming no sample bias, the maximum margin of error for the National sample is ?? 3.1%, ?? 5.6% for the overall L.A. area sample, and ?? 5.7% for Hispanics in the Los Angeles area .