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Hispanic Americans play an increasingly vital role in the U.S. economy. While Latinos make up about 20% of the overall population, they represent 25% of all new small business owners. According to Arizona State University’s W.P. Carey School, Latinos are the fastest-growing contributors to the U.S. economy, are quick to join the labor market, and are responsible for $3.2 trillion of the nation’s gross domestic product.
While Hispanic Heritage Month is an opportune time to celebrate these achievements, it is also important to remember that, as a whole, Latinos are not as well off as other groups.
According to the Federal Reserve’s latest report on the economic well-being of U.S. households, for example, while 82% of Asian adults and 76% of White adults said they were doing at least okay financially in 2023, only 68% of Black adults and just 61% of Hispanic adults said the same. That report found Hispanic adults are more likely than their Asian and White neighbors to be taking care of an aging parent, to lack access to a bank account, and to use buy now, pay later platforms. More than one-quarter of Hispanic adults, 27%, could not pay all their monthly bills. (That figure compared to 11% of White adults.) Hispanic adults also were more than twice as likely than Asian adults to carry a balance on their credit card.
Juan Carlos Guilbe, financial advisor and certified debt specialist, acquired Debt Freedom USA in 2018 and with these challenges in mind, he transformed the firm into one that exclusively serves his fellow Hispanic Americans. “I wanted to assist my community,” he said. “But I didn’t want to just provide debt relief solutions. I also wanted to help educate people about personal finance and how to stay out of debt.”
Today, anyone in need of financial advice can call Debt Freedom USA and find an expert willing to help. Guilbe and his team also have found other creative ways to provide financial healing in the Hispanic community.
Building trusted relationships with Hispanic consumers
Debt Freedom USA’s debt resolution clients typically have about $15,000 in unsecured debt, or about half of what the typical debt resolution client owes. The individuals who seek Debt Freedom USA’s help are more likely to be carrying credit card or auto loan repossession balances than medical debt.
While their levels of debt are lower, these clients and families face large obstacles when it comes to resolving their debt. Guilbe outlined the top three: language, an unfamiliarity with the culture surrounding the U.S. financial services industry and budgeting in general, and a lack of knowledge about what their rights are as consumers.
Debt Freedom USA helps its clients overcome these challenges.
“We are the person in their corner,” said Guilbe. “We just want to provide a service to the community. We are not selling. We are like a hospital, financial doctors trying to provide the service and empathy to people who are struggling financially.”
Debt Freedom USA continues to help its clients after they have completed the debt resolution process. The company provides online consumer bank accounts and is exploring better ways to help Latinos monitor their credit reports and invest funds once their debts are paid. Debt Freedom USA is also examining how the industry can provide financial counseling in a way that simultaneously improves overall mental health and well-being.
“One of the leading causes of divorce for Latinos is debt,” noted Guilbe. “We want to build a relationship with the community that transcends debt resolution and helps them sustain their financial freedom.”
A mission to advance financial literacy
To improve financial literacy within the Hispanic community, Debt Freedom USA operates a website, www.saludfinanciera.org, that discusses everything from how to set a budget to how to responsibly use store-issued credit cards. The company’s blog also tackles topics like how to raise a credit score and how to address collection calls.
Debt Freedom USA also operates classes in the community in both English and Spanish. Thousands have taken these courses, which are offered for free.
In addition to the work that his company does, in 2019 Guilbe launched a Spanish radio show in New York that offers advice for how to live financially free. In 2020, he started a YouTube channel called Finanzas con Humor that earns about two to four million views monthly and produces four to six episodes each week. On these platforms, Guilbe tackles everything from the importance of having an emergency fund to how to properly use a credit card, compound interest, and investing.
Between the radio show, the YouTube Channel, and Guilbe’s social media accounts, Debt Freedom USA estimates the company’s financial literacy message has reached nearly 500 million people worldwide, about 70% of whom reside outside the United States.
“The company is filling a void around the world when it comes to financial literacy,” said Guilbe.
10 strategies to stay financially free
Debt is not a fact of life, but in the United States today, it is difficult to stay out on the right side of the financial ledger. As the mental wellness website TalkLife reports, people feel the need to follow the same lifestyle as friends or acquaintances, to give gifts for even small milestones, to adhere to social norms, or to prove they have “made it.”
“These desires are as strong in the Latino community as anywhere else”, Guilbe said, and when combined with a lack of financial knowledge, they can spell disaster.
Guilbe has offered 10 strategies to remain financially free. They are:
· Stop increasing debt
· Record your expenses
· Classify your expenses
· Prepare a budget
· Use only cash
· Calculate the amount you will use to partially pay the debts
· Estimate the amount in debt
· Start paying off your debt
· Eliminate debts by priority
· Don’t give up
The last piece of advice is, of course, one of the most important. No matter what a consumer’s debt is, with a trusted and accredited AADR partner, there is always a path forward.
