Stock

Studies of a pandemic: "I'm actually getting cash worries as a result of I don't know if issues can be closed once more"

Ellie R., 24, of Los Angeles, was brimming with hope for the future as she graduated from college in 2019. She got a job at a finance startup hoping to apply to law school – but in March 2020 the pandemic derailed her planning to take the exam.

"All of my future plans have been put on hold and I was just put on survival mode," she said. "Everything has crumbled somehow."

With her parents on leave from work and using their income to make mortgage payments, Ellie sent them about $ 800 a month between March and December to help out with utilities, phone bills, and purchases. She eventually found it difficult to keep up with her own bills and fell behind with rent and phone payments.

"My check was now split in two – I had to pay for my belongings in addition to my parents' belongings," she said. She was unable to save the money on her stimulus checks, she added, and while she was grateful to receive tenant assistance from the city, "even that came very late" and didn't cover as much as she did expected.

Ellie's parents have since returned to work with changed schedules, with her mother worried about job security and her father being overwhelmed by an understaffed team. Ellie has started saving small amounts and is preparing to apply for law school again, but worries about "repeating the cycle" if there is another wave of COVID-19 shutdowns.

"My mental health was not good," she said. "I was really sad about all of this and I get really worried about money because I don't know if things will be closed again." She says the only issue she made sure of was the therapy that helped her through that time.

Financial Consequences for Latino Millennials

Ellie, on the cusp of a generational break at 24 and most identifying as a millennial, is one of many Latin Americans who have seen the financial ramifications of the pandemic – and struggle to save despite giving support to family members.

These and other challenges have been exposed in a new Bank of America
BAK,
-0.73%
Study shared exclusively with MarketWatch that highlights the differences in savings, emergency funds, financial responsibility for loved ones, and financial goals post-pandemic between Hispanic and non-Hispanic Millennials.

Hispanic Millennials are more likely than their non-Hispanic counterparts to say they did not have enough savings to withstand the effects of the pandemic (27% versus 17%) and to report that the pandemic had affected their saving ability (72%). vs. 59%), according to the survey.

"
Hispanic millennial women in major caring roles were more likely than men to report financial challenges, such as lost income or difficulty paying bills.

They also find it rather difficult to save (38% vs. 29%) and say that they have no financial role model or someone who asks for financial advice (51% vs. 39%).

Some of the main barriers to achieving financial goals identified by respondents: loss of income (26%), inability to save (25%) and instability or job loss (19%). Hispanic millennials (19%) are more likely to remain unemployed during the pandemic than their non-Hispanic peers (14%).

Meanwhile, about seven in ten Hispanic millennials provide financial assistance to family members, compared with 53% of non-Hispanic millennials, according to the study. Almost a quarter say they have increased or are increasing their financial support for the family due to COVID-19, with Hispanic millennials twice as likely (18% versus 9%) to feel a sense of financial responsibility for their loved ones.

The importance of the family

"The survey underscores the importance family plays in the lives of Hispanic Millennials," Raquel Gonzalez, a Bank of America executive on Hispanic-Latino consumer and small business strategy, told MarketWatch. "What we have seen is that the commitment to the family and the well-being of their family has only grown stronger."

Nearly six in ten Hispanic millennials receive some form of financial support from their family, as opposed to nearly half of their non-Hispanic counterparts, suggesting that "support is a one-way street," the study added.

Even so, many respondents seem to lack "a financial role model or someone they can really rely on to provide financial advice," added Gonzalez, underscoring the need for financial literacy as Hispanic millennials continue to weather the effects of the pandemic. She offered a plug-in for Bank of America's Better Money Habits platform, which has tools and resources in English and Spanish to support goals like saving, home ownership, and retirement.

Following national trends showing that the care burden has declined disproportionately on women in the pandemic era. Hispanic millennial women (56%) are more likely than their male counterparts (34%) to take on some kind of caring responsibility, the survey found – and they are much more likely to juggle childcare (35% vs. 15%).

Hispanic millennial women in major caring roles were more likely than men to report financial challenges, such as lost income or difficulty paying bills.

Ellie, who didn't take the Bank of America survey, was forced to take her siblings in for a month and a half after their parents contracted the coronavirus and were quarantined. "I was basically my parents 'parents and my siblings' parents," she said. "It was just a lot for me."

"
"It is my dream that holds me together to keep fighting for it, because it is still there and I can still reach it."

– Ellie R.

Ellie added that first-generation Latin Americans often feel burdened as "saviors" of their families: "Whoever goes to college first gets their first company job, everything first."

"Right now it feels good because you're the first to do it," she said. "But at the same time, nobody thinks about the psychological stress it puts on you because you never feel like it's enough." The pandemic presented an unprecedented hurdle, she noted.

The survey of 1,015 general population adults, 515 Hispanic adults, and 394 Hispanic Millennials (ages 24 to 40) was conducted by Ipsos between June 14 and 28.

In the study, the terms Hispanic and Latino were used interchangeably, with Ipsos using an adapted version of a census question to determine Hispanic ethnicity and asking respondents if they were Spanish, Hispanic, or Latinos. Respondents might identify as Mexicans, Puerto Ricans, Cubans, and other Hispanic or Latin American groups.

Much earlier data has confirmed the disproportionate economic impact of the pandemic on people of color: for example, a January study by the Pew Research Center found that the majority of black and Hispanic adults viewed their personal financial situation negatively.

Why study Latino Millennials in particular? According to Gonzalez, "they represent the future".

"The Latino population is typically younger, so we know that millennials will play a really important role in the workforce going forward and (and) their contribution to the overall economy will be important," said Gonzalez. "In terms of the customers we use as bank customers or who we serve in our community, they will make up a high percentage of the population."

Hispanic millennials are also more likely to say the pandemic has affected their financial values ​​or plans to spend or manage their finances (71% versus 58% of non-Hispanic millennials), the study found. They are more likely to say that they plan to set up an emergency fund after the pandemic (48% vs. 36%). Just over half say they are “very” or “somewhat” optimistic about their financial prospects.

For her part, Ellie is saving $ 20 per paycheck to provide a financial cushion for future shutdowns. COVID-19 made her rethink what was worth investing in – she no longer needs a gym membership or a car, for example – and focus her efforts on paying off her student loan debt.

The pandemic has also pushed her back to school more than ever as she seeks "some edge" to complement her bachelor's degree, citing the Latinas' well-documented wage gap compared to their non-Hispanic whites male colleagues. She is studying this fall to do the LSAT.

"It is my dream that holds me together to keep fighting for it because it is still there and I can still reach it," she said. "That's the only thing that COVID has taken from me – I don't want to let COVID take it again."

Related Articles