The wealth gap between non-Latino families and Latino families in the United States is significant, with non-Latino families accumulating five times more wealth on average. Latinos face various challenges in building wealth and acquiring financial literacy, including a lack of intergenerational wealth transfer and financial literacy within Latino families, a lack of financial education platforms, racial disparities, limited access to capital, language barriers, and fewer investment opportunities. Let’s take a closer look at some of the obstacles Latinos face when trying to improve wealth management and financial outcomes. Lack Of Intergenerational Wealth Transfer One of the key factors contributing to the wealth gap among Latinos is the lack of intergenerational wealth transfer within Latino families. Many immigrants and underserved communities do not have the same number of generations to have built wealth in the United States, resulting in a significant lack of inherited capital. Conversations Around Money Are Considered Taboo Most young people learn the basics of wealth management from their parents, however within the Latino community, conversations around finances are often considered taboo and are therefore avoided altogether. In fact, studies show that Black and Hispanic households have the lowest rates of financial discussions. The lack of generational wealth transfer, coupled with the taboo of financial discussions among Latinos, leads to generations of Latinos earning less over their lifetimes compared to their non-Latino counterparts. Limited Access Fo Financial Markets And Barriers To Homeownership These barriers play a crucial role in wealth accumulation. Homeowners tend to own more assets and have higher net worth compared to renters; however, Latino homeowners have a net worth that is half as much as non-Latino homeowners, highlighting the disparities in homeownership rates between the two groups. Because of significant pay losses, Latinos may face limits in their ability to build generational wealth. Distrust In Financial Institutions One study showed that 8.4% of Hispanic households are unbanked, compared to only 1.7% of white households with incomes between $30,000 and $50,000. When asked why they are unbanked, 13.2% cited distrust in banks. This distrust is understandable given that many Latino families are still dealing with the fallout from the 2008 financial crisis, which decimated Latino wealth through risky subprime mortgage loans; Hispanic families lost 44% of their wealth between 2007 and 2010. Lack Of Financial Literacy Education, Especially Among Latino Youth When we surveyed a small group of Latino youth between the ages of 18-29, only 10% said they have attended a class focused on enhancing financial management skills. Enhancing financial literacy education, especially among Latino youth, empowers individuals to effectively navigate intricate financial systems, and to grasp the significance of budgeting, saving, investing, and managing debt wisely. Prioritizing financial literacy education for Latino students is an investment in their future achievements and the prosperity of their communities at large. It is crucial for improving financial outcomes for the next generations of Latinos in America. Connecticut’s high school curriculum faces challenges in meeting National Education standards due to its heavy emphasis on core academic subjects. In Connecticut, Governor Lamont signed Senate Bill 1165 into law in July 2023 to align with federal mandates, yet the responsibility for implementing financial literacy education in schools lies with individual institutions. While graduation requirements include proficiency in financial literacy, the specific integration of this mandate into school curricula varies, with some schools incorporating it into existing subjects like Mathematics. Traditional subjects such as mathematics, science, language arts, and history are prioritized to ensure students acquire foundational skills, leaving limited room for additional content like financial literacy. Despite the universal recognition of the importance of financial literacy for students’ future success, differing perspectives on educational priorities and resource constraints may hinder efforts to expand the curriculum. According to a survey conducted by the TIAA Institute, Hispanics tend to have lower financial literacy than U.S. adults in general, with only 38% answering the Personal Finance Index (P-Fin Index) questions correctly, compared with 50% among all adults. Among Latino youth, this percentage is even lower (35% for millennials and 36% for Gen Z). Providing financial literacy information to Latino high school students is essential for promoting economic empowerment, breaking the cycle of poverty, and fostering financial independence and stability within Latino communities. By equipping students with the knowledge and skills to effectively manage their finances, we can help them build a brighter and more prosperous future for themselves and their families. Collaboration and advocacy among stakeholders are crucial to address these challenges and elevate financial literacy as a top educational priority. Updating the curriculum, providing enhanced teacher training, and garnering support from all parties can ensure that students acquire the essential skills for financial success and informed decision-making. Additionally, financial institutions can play a critical role in helping to facilitate financial literacy among Latino youth through community outreach and fair lending practices that prioritize building trust and knowledge. By providing education on financial literacy, wealth management, and investment opportunities, we can help bridge the wealth gap and empower Latinos to achieve financial freedom and create a more secure future for themselves and their families. Latinos, Literacy & Wealth was first published on Advisor Magazine. This article was generated by Jasmine Cruz, Sandy Morris, Francy Gutierrez, Jennifer Doran, Jessica Rivera and Rebecca Melley as a result of a capstone project developed by one of Latinas & Power Corp.’s programs called the Latinas in Leadership Institute (LiLi). The women worked in teams to address issues impacting the Latino community. For more information, please visit https://www.latinasandpower.com/institute/latinas-in-leadership/about-lili.The post OPINION: Latinos, Literacy & Wealth first appeared on CTLN.