It’s official! Welcome to the year 2024! You may feel nostalgic or relieved to leave another year behind you. You know the drill. New year, 365 new opportunities. And in the case of ‘24, they’re actually 366 (that’s right, it’s a leap year)! So, no matter how 2023 was for you, this is a fresh start to set a new list of goals to achieve. No pressure at all! So, let’s talk about what everyone has in mind at the beginning of a new life season. Financial Wellness.
Do not be afraid. Talking about money is as necessary and important as talking about your health. Some may consider the financial topic a little bit of a taboo, in fact, research shows that Hispanic and African Americans are less likely to talk about money in their households. According to a survey, Hispanic Americans prefer to talk about death, religion, and taxes over money. Only politics scored as more difficult to talk about among key topics, with 43% of individuals believing so.
But, as mentioned before, this is a new year with 366 new opportunities (if not more), so let’s get started with that financial wellness plan and improve the numbers not only of our wallets but of us, Latinos, starting to openly talk about it.
1. Include Budgeting In Your Daily Routine
There’s a popular rule when it comes to building your budget. It is known as the 50-30-20 rule, and personally, I can tell you that it works. However, sometimes you need to change minor things in your daily life. But if you are ready to achieve new goals this year, this is a great way to start.
The 50-30-20 rule suggests distributing 50% of your money to needs, 30% to wants, and 20% to savings. The savings category also includes funds required to achieve your long-term objectives.
I know that with inflation these days, it may sound impossible. But you do not need to follow this rule strictly right away. After all, achieving financial wellness is a long way and a very personal one. So, you are always free to set the percentages that work for you the best!
The important thing here is that you know where your money is being destined. To do so, you can set an hour a day for you to check your spending, the payments you need to make ASAP, and what you can cut down or improve in order to have a healthier relationship with your finances.
First thing first. Pay your debts. Once you are debt-free, you are not obliged to give money to anyone but yourself and the services you are hiring. Then, check what can be reduced. There’s also a general belief that if you reduce your daily coffee buying, you can make more money. It is not true at all. First, there are many reasons why this won’t affect your financial wellness, you are probably losing more money to fees than on a daily coffee. Second, you cannot sacrifice something that gives you joy thinking that after a while it will make you rich. It won’t and you’ll be miserable or, at least, sad. So keep up with the cafecitos, and -why not?- prepare some delicious treats at home to enjoy them.
Checking your spending and recognizing things you can cut from them or how to spend your money more responsibly, won’t only give you power over your finances but you’ll see if there’s anything to spare for your future self—like a retirement or an emergency fund, planning a trip. The sky’s the limit! The only thing you need to do is set your mind to it for an hour a day!
2. Learn To Spend Mindfully
Emotions may dictate many things in our lives. Some cause a positive effect, like when you say to a special person that you care about them. Or when you stand up for equal rights.
But they can also manipulate our decisions and not for the best. Like when you break up with someone and find out your credit card’s limit after some very, very emotional spending. Or when you didn’t get that job, so the shopping mall and the coffee shop become your new best friends.
When you review your spending habits, try to recognize how you were feeling at that moment. Out of what sentiment were you buying that jacket? Was it worth it or do you now see it and feel guilty about it?
Try to associate your feelings with your spending. Point out the red flags, but also congratulate yourself on the green flags! No matter what Carrie Bradshaw said, more shoes won’t take the pain away. They may help, but after you see your credit card score… it may make it worse.
So, when buying something, try to be mindful about it. Be present and honest with yourself. “I am buying this because I need it,” “I am purchasing this because I want it and it’ll make me happy,” “I just want to buy something to get my mind out of this thing.”
You’ll see that you get to be more responsible and enjoy what you are spending on your money more!
3. Challenge Yourself!
Almost half of the Latinx population may rather talk about religion, death, and even taxes (talk about a cheerful sobremesa!) than having an open conversation about money. That may play a disadvantageous part for many minority groups when it comes to closing a deal, asking for a raise, or even building healthy relationships with their partners.
Having an open conversation about money with people you trust, friends, and family, will help you not only learn more about things or habits that may be helpful for you. Like, for example, how to ask for a raise or salary expectations, but will also feel like a relief (always being done responsibly and with respect, like any other topic-sensitive conversation).
Also, dare to take financial courses to learn how to invest, for example, or download a budget app to build a healthier and easier-to-track financial habit. Challenging yourself and learning new things will boost the way you relate to your financial statement and it will also help you to achieve your goals!
It is not easy, but it is not impossible either! This is a new year but crises all around the world, inflation, and salary expectations won’t beat you. In fact, it will be the other way around! Remember that as Latinx, we are resilient as they come. Agarra el toro por los cuernos and crash your financial goals!