How Latinas Can Overcome Financial Trauma

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Photo courtesy of dailyherald.com

Money is not an easy subject. How we manage our finances as adults is influenced by our relationship to money in the past, which is not necessarily positive. For Latinas, it is common to carry some financial trauma.

Jen Hemphill calls this her “past money story.” Hemphill is the author of a book called Her Money Matters, the host of the podcast Her Dinero Matters, and an Accredited Financial Counselor.

Hemphill is committed to educating Latinas on financial literacy in accessible ways. Her platform goes beyond the kind of information that can be easily Googled. She uses her own context and experiences to help with some of the obstacles Latinas encounter in this area.

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Photo courtesy of Twitter @jenhemphill

“I am a Colombiana and an Americana by birth. I moved to the U.S. when I was eight years old, and I was brought up in a household — like I know a bunch of us were — where money was scarce,” shared Hemphill. “There were a lot of financially challenging times, which really left an impact on me as a little girl.”

As children and young adults, many of us were not used to asking our parents for any money. Hemphill empathizes with that: “I didn’t ask because we couldn’t afford things. So I was a child at ten years old who was babysitting, and anytime I had the opportunity to make money, I was there,” she said.

In times when she felt financially stuck, it was her emotional baggage that held her back. Hemphill confessed that her mind always went back to “Oh, we can’t afford that. We don’t have enough money,” even if she wasn’t in a bad financial situation. 

Children understand the world through observation. As a result, we first learn how to behave by modeling the adults in our lives. The more we associate money with stress in our early years, the more likely it is for us to develop money anxiety in the future.

This does not mean that silence around money is a better alternative. Children who are kept in the dark about money may avoid financial responsibility as adults. When Latina girls are told that money-related matters are “cosa de adultos,” we are prevented from developing knowledge of money management skills at a young age.

Growing up in a low-income household may scare Latinas away from investment and affect our money management behaviors. However, misogynistic stereotypes have led people to assume that these are inherent gender traits rather than rational responses to current systemic issues.

According to a 2015 study by the University of Notre Dame, “women workers’ unequal labor force participation, career interruptions, part-time work, lower-ranking positions, and limited access to pension savings programs” are some of the issues that make Latinas shy away from seeking financial advice.

They are also problems with real financial consequences for Latinas, which manifest on a daily basis. Latinas currently have the largest gender wage gap in the U.S., and most institutions are not addressing this injustice, let alone solving it. On average, data shows that Latinas in the U.S. are paid 46% less than white men and 31% less than white women.

When asked how we can start the work from within, Hemphill said, “Companies aren’t doing enough, so we need to focus on what we can control. Working on our money confidence makes us acknowledge our money strengths, so that’s one.”

That’s why money confidence became a priority in Hemphill’s life. She defines the term as “having that belief in ourselves.” For her, it is about trusting ourselves despite our mistakes. “We’re going to make financial decisions that maybe don’t serve us, that’s okay. That’s how we learn. So it’s really about knowing that we can take control of our money.”

Another important step that we can take is making sure we’re crystal clear with our money, so we know what we have, what we don’t have, and that, in turn, helps us make better financial goals. This way, we can formulate a tangible dollar amount for the negotiating table, and “we are more confident not just in what we can bring to the table but what we can bring home as well.”

Frequently, being transparent with our money is difficult. In order to hold ourselves accountable, we need to surround ourselves with like-minded individuals. “It has to be people we trust because that’s the community that will back us up when times are tough. We need to uplift each other,” emphasized Hemphill.

Currently, she is in the process of creating a two-tier level membership for Her Dinero Matters listeners. The first one will be dedicated to those who just want to have a “community hangout,” and the second one for those who may need more support.

This is one way we can “talk money.” When we tune in to Her Dinero Matters and listen to Latinas like Jen Hemphill, who have followed a successful path and achieved financial goals similar to ours, we feel encouraged. We feel inspired. Even if online, surrounding ourselves with like-minded people boosts our confidence.

It is also a reality that many Latinas are overwhelmed by school, work, kids, stress, or all of the above. Some barely have time to eat dinner before going to bed. How do we find the time to get financially educated? Well, starting small is the answer.

We tend to feel like we need to solve everything at once. However, Jen Hemphill suggested that we first need to “identify our why.” Why is money management important to us? What can we accomplish? 

Setting an example of what kind of life that money can bring us will create a good foundation for this journey. If we focus on one goal at a time and keep a realistic timeline, every other target will feel more attainable.

“My big mission is just keeping it simple and doable because, if it’s simple and doable, we are more consistent with it,” explained Hemphill.