Financial Coach shared how to set boundaries with loved ones when it’s about money10.06.2022
Anybody can experience financial disasters. But Latinas are more likely than whites to be below the poverty line. Latinas make $0.55 on average for every dollar earned by a non-Latinx White man. This leaves them with the largest pay gap among all racial or ethnic groups. This leads to substantial losses. Latinas could lose $1,163,920 over the course of their 40-year careers due to the wage gap. They face obstacles, even if they try to climb the economic ladder and ask for promotions or raises from their employers. We recently found that for every 100 managers, 71 Latinas are promoted. Latinas are also less likely to have had financial guidance, regardless of income or position. They are more likely to make costly long-term money mistakes and incur huge financial losses.
Cindy Zuniga Sanchez is determined to make a difference in this area, by working with Latinas. Zero-Based Budget was founded by the Ecuadorian-Honduran money specialist. It is a coaching and social media platform that provides insight to people, especially women of color, about saving, investing and debt. Her clients also receive financial planning and budgeting advice. Zuniga Sanchez was born to a poor immigrant family in Bronx, New York. She is familiar with the cultural responsibilities and struggles of her clients. Having paid off $215,000 in college debt in four years, Zuniga Sanchez is eager to share this knowledge with those who are striving to build wealth.
“The nuanced approach that I bring is that because I have lived the issues, I am able to understand them.” Zuniga Sanchez tells us that she can offer a non-filtered, candid space for discussing these topics. “My biggest goal is to empower women, particularly women of color, in their financial confidence and the decisions they make for their money tomorrow.”
We asked Zuniga-Sanchez, a finance professional, about the most pressing concerns and challenges Latinas face in managing their money. Zuniga Sanchez identifies the key issues and provides solutions.
“When we’re in high school, all that our parents want is for us to go to college to achieve the dream,” says Zuniga-Sanchez. Zuniga Sanchez says that this immigrant dream requires an Ivy League, or private institution. “If you don’t have the financial means or full scholarships, it comes with a lot debt. My clients went to prestigious or private universities thinking that debt would not be an issue. But now they have six-figure debts and a job that doesn’t pay enough. It’s a big problem for us but not one that people want to discuss.”
The financial coach suggests that college graduates with $100,000 in debts receive $50,000 salaries. After you’ve completed this assessment, the financial coach suggests that you look into loan forgiveness programs. Many people don’t realize that they can get forgiveness up to $2,000 in loans. Zuniga Sanchez recommends that you create a plan for repaying the loans.
Her advice is to make monthly payments that are more than the interest being accrued. Your student loan amount will not be reduced if your monthly payments are lower than the interest accruing. Zuniga Sanchez says, “This is the most common problem that I see” and “the biggest source of frustration.” She recommends cutting back on expenses and creating new income streams if you are unable to afford an increase in your monthly payment.
“My parents still reside in the Bronx apartment they bought when they were married 47 years ago. As a daughter, it is my duty to care for them. My clients also feel the same responsibility. It is difficult, especially if you are starting at an entry-level salary or in a tough financial situation,” Zuniga Sanchez says.
Zuniga Sanchez suggests that you set financial boundaries with loved ones to avoid getting deeper into debt in order to save others.
You can help your parents pay their rent by setting a monthly amount. This will allow them to know what they are getting and allows you to budget. Offer to help a relative who has lost their income, but make it clear how you will be helping. She adds, “I can send $20 per month to you for the next four years.”
Financial institutions that you can trust with your money
The Federal Deposit Insurance Corporations of (FDIC) states that 12 percent of Latinx households have never been banked. Zuniga Sanchez says that this problem, which affects other communities of color, is caused by a legitimate distrust of financial institutions.
“Historically, the financial industry wasn’t made for us. It was designed for wealthy white men with properties.” Zuniga Sanchez says that the distrust begins there and continues to resonate in banks refusing mortgages to Black or Latinx communities and offering them higher interest rates. There are many reports about the blatant racism, discrimination, and financial services that have been provided to communities of color.
Zuniga Sanchez says that the problem is that many of us don’t have the means to save enough money to make it a million bucks. She says that you need to be able to manage your money and save enough money in order for this amount of capital to come your way. Financial professionals say it’s about researching your banking options and finding the right account for you. But trust and education are the key ingredients.
Becoming free from a scarcity mindset
People who grow up in low income homes often develop a scarcity mentality, believing there won’t be enough money. Zuniga Sanchez says this can prevent people from making smart, profitable investments. Even as a financial expert, it’s something she still experiences. “Before becoming an attorney with high income, I was the daughter of immigrants who grew up in a Bronx neighborhood. It can be difficult to believe that I deserve to make X amount of money, knowing what it is like to barely survive and live paycheck to paycheck.” She says that she wants to attain financial freedom, because she doesn’t want to be poor ever again.
Zuniga Sanchez admits she isn’t sure if she’s overcome the scarcity mindset, but she shares the advice that she gives herself and her clients. “You must look at money objectively. You can remove your emotions from money. It’s not always easy. This is why we have financial counselors. But, when we put aside our emotions, it is possible to be smart.” Zuniga Sanchez hopes that we all can eventually get closer together to our financial goals. She tells us that her greatest accomplishment is looking back in the future and seeing sisters, best friend, and clients rise alongside because we took action to achieve it.