Hispanic Fanatic

A friend of mine once cut up her credit cards and closed her accounts because, she said, “those pieces of plastic are evil.”

I thought this was a bit overly dramatic (she was that type of person). I also thought it was convenient to blame her chronic debt on inanimate objects rather than, say, her nonexistent self-control and materialistic tendencies.

In any case, we all know people who live beyond their means, and it’s true that many individuals teeter on the edge of bankruptcy because of their shopping addictions or love of new shoes or willingness to fly first-class to Italy for the hell of it.

But a recent study has found that when it comes to Hispanics, living large is often not the reason for going into the red. The study found that almost half (43%) of Latinos who have credit card debt depend on the plastic to pay for basic living expenses. And a significant chunk of the rest are using credit cards for tiny splurges at best.

So if Latinos are not slapping down credit cards on impulse buys and charging luxury items, why are they in so much debt?

Well, Hispanics report that the main reason for their debt is the loss of a job, and they’re more likely than other groups to say that medical costs also contributed to their financial issues.

The researchers theorize that because Latinos lost so much of their wealth in the Great Recession, they’re having trouble restocking checking or savings accounts. So putting basic items or medical expenses on credit cards often seems to be the only option.

This, of course, sucks. But as is often the case, the survey also found that Latinos are more optimistic than the overall population. So they’re more confident about paying down their credit card debt quickly.

This optimism, which borders on delusion, leads to some interesting contradictions.

For example, another poll found that almost half of Latinos (49%) said they were worried that someone in their household might become unemployed soon. Yet the same survey found that almost three-quarters of Latinos (73%) are optimistic about their finances and future opportunities.

Frankly, that’s a bizarre balancing act of fear and hope.

But maybe these results just show that Latinos are still jumpy about their financial status, years after the economic meltdown. The Great Recession so ravaged Hispanic households that many Latinos are leery about declaring that the worst is over.

At the same time, Latinos tend to be more optimistic than other groups about their future. The main reason for this positivism seems to be the immigrant mindset. Many Hispanics remember struggling in their home countries, or they hear the harrowing tales of their parents. As such, these Latinos usually have more faith in the American system and a stronger belief that their financial situation will improve.

We should all really, really hope they’re right.

In the realm of simplistic nonsense, few ideas are more insidious than the claim that you don’t need money if you just, well, love each other a whole lot.

This sentiment has lived on despite the well-documented fact that the number-one cause of marital tension is money. It also ignores the overwhelming financial stresses that clobber poor people every day.

And as for how poverty affects children, well, the data is just too depressing to mention.

And now a study has verified what we all suspected, which is that a family’s income level is a better indicator of the overall well-being of children than other factors. The research “cuts against the grain of oft-stated public opinions on traditional family composition,” which is a nice way of saying that being married doesn’t matter much when it comes to raising kids. Having bucks is vastly more important.

For example, the study found that just 9% of children from the lowest income bracket go on to earn college diplomas. But 77% of children raised in the top quarter of income eventually graduate college.

Take a look again at those numbers. They basically say that if you come from a poor family, you almost certainly won’t go past high school. But if your parents are somewhat well-to-do, you have a great shot at snagging at least a BA.

The researchers believe that richer parents — whether they are married, divorced, or single — can afford to provide their kids with certain advantages, like the best pre-schools, trips abroad, and extracurricular activities.

Hispanic parents often do not have the financial ability to offer their children such resources. So while our strong familial bonds help kids develop into responsible adults, it is no match for the dollars that rich people can spend on their offspring, who will almost inevitably do better in life.

Of course, a rugged individualist is bound to say, “Tell those lazy Latinos to work harder and get out of poverty.”

And this brings us back to simplistic nonsense.

You see, another study says that roughly two-thirds of low-income Latino children have at least one foreign-born parent. This isn’t surprising, as recent immigrants are often poor. But what’s interesting is that low-income Hispanic children are also more likely to have at least one employed parent, compared to other low-income children. This means Latino immigrant parents are more likely to fall into the category of the working poor.

So Hispanics, especially immigrants, are already working harder than many poor people. And yet they are still broke.

The study points out that poverty hits Latinos disproportionally. In addition, poverty often plays out differently in Hispanic households, in that the influence of extended family and community is stronger, which can be an asset.

However, it can also be a hindrance, in that low-income Latino homes often have different structures than the general population. For example, low-income Hispanics may have to set aside money for elderly parents or for remittances back home, which can cut into funds for childcare.

The study also found that among Latino children with a foreign-born parent, just 36% live with parents who are married. But of course, that doesn’t matter much, does it?