WASHINGTON — Hispanics are less likely to save regularly than Americans overall because they are typically younger, have lower incomes and are less proficient in English, an analysis suggests.
The lack of savings contributes to a gap in net worth between Hispanic and all American households, said Stephen Brobeck, executive director of the Consumer Federation of America.
The federation and Freddie Mac said last week they were joining with Hispanic groups to create a program known as "Hispanic America Saves," an expansion of a program known as "America Saves," which has enrolled 13,000 people who develop savings goals and a plan to achieve them. Hispanic America Saves will provide information in English and Spanish, a newsletter and free advice from registered financial planners.
The typical Hispanic household in the United States has a median net worth of $11,450, compared with $86,100 for all American households, according to 2001 data from the Federal Reserve Board.
The net worth was calculated by adding the value of personal economic assets such as home equity, life insurance, retirement accounts, the value of a car and other property and subtracting consumer debt.
Only 33 percent of Hispanics save regularly, compared with 41 percent of all Americans, and Hispanics plan financially for the next few months as opposed to the next 5 years, the analysis found.
"Does this mean Hispanics are not as good savers as other Americans? Not at all," said Brobeck said. Hispanics sent $13 billion last year to other countries, indicating they are saving, he said. That money was not included in analysis’ net worth calculation.
Manuel Mirabal, president of the National Puerto Rican Coalition, said one barrier to saving is that almost 70 percent of Hispanics work, their incomes are low.
"Making do every day for what they need to provide for their families makes it that much harder to save," Mirabal said.
The median age for Hispanics in 2000 was 26, compared with 35 for all Americans. A greater proportion of Hispanics are foreign-born, and limited English language skills narrows earning and savings potential, Brobeck said.
Census data from 2002 showed that only 48 percent of Hispanic household own homes, a key asset for building personal wealth, compared with 68 percent of all households.
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