Teaching financial literacy to Spanish-speakers

Consumer Action experts conducted a workshop for community agencies from various states that focused on how to teach financial literacy skills to the Latino community.

As part of the MoneyWi$e financial literacy training held in early May, 2006 in Miami, a group of experts discussed how to teach financial literacy skills to the Hispanic community. Sol Carbonell of Consumer Action, Claudia Guevera, a former staff member, and Lisa Yep Salinas, founder and director of Communications Services of Sacramento, led a training that addressed some of the main concerns that community-based organizations face when starting financial literacy programs for Spanish-speaking members of their communities.

Click here to download PowerPoint slides on presenting to Spanish-speaking consumers.

Among other topics, trainers and participants discussed:

• Challenges and Opportunities
• Most Common Financial Mistakes Made by Latinos
• How to Implement a Successful MoneyWi$e Program for Hispanics

Challenges and Opportunities

After a role-playing activity in which Guevara and Salinas interacted to illustrate some of the common misconceptions or culturally associated ideas that Hispanics have about financial institutions, financial services and money in general, trainers asked participants what were the main obstacles their organizations faced for implementing a financial literacy program for Latinos.

Participants identified structural barriers such as a lack of bilingual and bicultural staff and the difficulty in finding educational materials that are relevant and appropriate. Trainers added that language, the ability to participate, immigration status and different cultural experiences often prevent Latinos from taking advantage of information and resources already available.

In addition, Sol Carbonell shared with the group that, according to Louis Barajas—one of the top 100 financial planners of the country—The Most Common Financial Mistakes Made by Latinos are:

• Approaching the wrong people for advice
• Being embarrassed to ask questions because they don’t want to look like fools or just don’t want to be a bother
• Working with cash: Latinos don’t trust banks and don’t use checking accounts
• Considering price more important than competency; they look for a person who will give them the best deal
• Believing that making double payment on a credit card bill next month because they missed that last month’s payment will not ruin their credit
• Financing major items (autos, homes, furniture) without understanding the terms and documents they are signing
• Cosigning loans for family members who have bad credit
• Believing that the lottery is an investment
• Believing that if they invest in their company’s 401(k), their company may someday take their money
• Believing that the “best” tax preparer is the one who gets them the biggest refund
• Believing that a tax refund is a form of savings plan
• Getting their family involved in multilevel marketing schemes without properly investigating the companies
• Not preparing a will or trust, or not buying life insurance because they are afraid to discuss death

Successful MoneyWi$e outreach

Taking into consideration these challenges, opportunities, and common financial mistakes, trainers outlined some of the steps to implement a successful MoneyWi$e program for Latinos.

Develop trust: Latino immigrants typically don’t trust financial service companies, but rather Spanish-speaking Latinos in their community perceived as helpful in making financial decisions. This perception leaves Latino immigrants vulnerable to predatory behavior . Community-based organizations can play a key role in providing a link to mainstream, legitimate financial services and institutions.

Tailor your program: Utilize the free MoneyWi$e Spanish brochures, leaders’ guides, lesson plans and activities to develop a customized program that integrates Latinos’ needs and resources available in your community. Think about your audience: according to the National Council of La Raza, although Latino women are typical household decision makers, sometimes a school-aged household member advises the parents on financial decisions.

Start with the basics: “One third of U.S.-born Hispanic residents and over half of all Mexican immigrants lack bank accounts, according to 2000 figures from the U.S. Census Bureau.” All the MoneyWi$e modules can be taught separately. An excellent way to start is by teaching “Banking Basics,” a module that describes the basic financial services available at banks and credit unions. (See Banking Basics Module).

Create both formal and non-formal partnerships:

• Partner with local financial institutions that may have Spanish-speaking representatives.
• Involve Latino leaders, churches and other Latino service providers from your community when implementing the MoneyWi$e program. Invite them to share their experiences.
• Invite the Latino media to your classes, or send a brochure and schedule to your local Spanish newspaper and radio. You may also utilize the information available from the MoneyWi$e brochures and website (www.money-wise.org) to create press releases.

Personalize your program and link it to tangible results: In a report produced by the National Endowment for Financial Education, experts recommend personalizing the approach to the point where Latino immigrants have a clear understanding of why they should want to know transaction costs, save money on remittances, open a checking account, establish credit, save for retirement, etc.

Some specific activities that can be taught in conjunction with the MoneyWi$e modules are how to:

• Negotiate day care rates
• Understand what predatory behavior is and how to spot it
• Determine and compare the cost to cash a check or send a remittance
• Avoid robbery and wage theft

Sources: National Council of La Raza, National Endowment for Financial Education and Luis Barajas, The Latino Journey to Financial Greatness

Role playing activities

This conversation takes place between two neighbors, Maja and Elisa. Maja has just returned from a session with a financial counselor at the Community Center where she learned about banking.

Elisa: Hi Maja, how are you doing?

Maja: Ok, I just had a meeting with a counselor over at the Community Center. She was trying to teach me about banking and how to choose the right bank. The problem was that I didn’t understand a lot of what she was saying. She spoke very little Spanish and some of the Spanish words she used I had never heard of. I’m just not smart enough to understand this.

Elisa: Well my sister-in-law says those places don’t really help you. They just care about making money.

Maja: Well I don’t know about that. I didn’t have to pay anything. I think if I could just understand all the information it would be very helpful to me. Since I’ve only been in the country for a short time, I don’t understand how a lot of these thinks work.

Elisa: That’s another thing, how do you know they won’t try to call immigration on you.

Maja: Well the counselor told me everything was confidential and I didn’t have to tell her my immigration status.

Elisa: But they know and besides how do you know they’re going to keep you’re information confidential?

Maja: Elisa, I really don’t think those people are like that. The counselor who helped me was really nice. You should go and talk to her. You speak better English than me you’ll probably understand more of what she has to say.

Elisa: Humph! What for she can tell me to put what little money I have into the bank where it can get stolen. My sister-in-law says you can’t trust the banks all they want is your money. I would rather hold onto the money myself so I know where it is at all times.

Maja: But what if it gets stolen?

Elisa: Well it’s the same as if it gets stolen in the bank. I remember back in my country there was a financial crisis and all the banks closed down-we couldn’t get our money from the bank.

Maja: The counselor told me that your money is safe in the bank.

Elisa: That’s what they want you to think. My sister-in-law says banks are just capitalist devils and will try to make you believe anything.

Maja: Well she told me that here banks have insurance to protect your money from on Wednesday with the counselor. Next time I go we’re going to talk about credit.

Elisa: No, thanks. My sister-in-law always helps me with things like that.

Maja: But these people are professionals, it couldn’t hurt to talk to her.

Elisa: No, maybe some other time.

Maja: Well if you change your mind, let me know.

Teaching adults

For general tips on teaching adults, MoneyWi$e best practices, and additional ideas for using the MoneyWi$e financial literacy educational materials, click here.