Hispanics are feeling positive about their financial situation, according to new research commissioned by Massachusetts Mutual Life Insurance Company (MassMutual), despite the slow growth in wages and still rebounding economy. The study examined the perceptions Hispanics have of their finances today as compared to the past, and how prepared they are for emergencies.
Part of a comprehensive research platform to foster a deep understanding of today’s diverse families and the trends that may affect their finances in the coming decade, the survey results found that most Hispanics (74 percent) feel they are better off financially now than they were three years ago and may be better prepared for potential financial crises.
“Hispanics are gaining financial confidence, and we want to ensure that they will feel even more prepared for their financial future,” says Dr. Chris Mendoza, vice president, Multicultural Market Development.
The top reasons why Hispanics feel more optimistic about their financial future this year than they did three years ago include getting a new job (40 percent), receiving a promotion or raise (34 percent) or gaining money on investments (18 percent). Some of this financial optimism could also be partially attributed to perceived preparedness – as most Hispanics say they have a plan to bounce back from financial challenges (85 percent).
Other key findings indicating how prepared Hispanics are to weather financial crises include:
- Having sources of income that can be leveraged to come back from a financial calamity:
- Almost half (45 percent) indicate they’d lean on their savings accounts in moments of need.
- Only 18 percent have taken out a loan from a bank.
- Only 13 percent have taken money out of a life insurance policy or retirement fund, when faced with a financial challenge.
- Very few would first cut contributions to a 401k or retirement savings (12 percent), if an unexpected financial challenge arose.
- When faced with financial challenges, Hispanics are most likely to give up:
- Taking out-of-town vacations (60 percent)
- Buying lunch out (56 percent)
- Going out with friends (51 percent)
- Eliminating the purchase of premium foods/beverages (43 percent)
- On building a resilient financial plan for the future:
- More than half (54 percent) of Hispanics put money into a savings account to bounce back from financial challenges.
- 53 percent learned from their mistakes as they went along.
“Having a plan to recover from unexpected challenges is important to keeping you and your family on track toward long-term goals,” says Mendoza, “but it’s also critical to look at what’s truly important – the people whom you care about, the aspirations you have, the things you want to protect and the support you’d like to give to others. The first step is to get informed and educated about financial matters to make smart decisions about today and tomorrow.”