Life Issues

Financial advisor tells Latino families — stop living in “crisis mode”

Financial advisor tells Latino families — stop living in “crisis mode”

By Andrés Gutierrez
LatinaLista

Imagine your child is sick, and the vaccine that would save his life costs $1,000.You have 30 days to come up with the money — but you can’t borrow it. Could you save $1,000 in one month?

Of course you could. Why? Priority.

For most people, saving money is not a priority. But the scenario above changes that. Saving money becomes more important than pizza, cable, pedicures, movies and even your cell phone. No one wants to give up these things, but you would give them up to save your child’s life, wouldn’t you?

There is no mathematical formula, budget or software that will make you save. You will save money only when it becomes a priority. When people show me their budgets that include unnecessary spending, they say, “You see, Andres, there is no money left to save.” My response is always the same: “I’m sorry, but you have your budget upside down.” Save first, then spend.

A Plan for Life

We all want to give our kids a debt-free college education. We all want to retire without depending on Social Insecurity. By allowing ourselves to dream about college and retirement, we identify goals we must reach to make those dreams possible. And to reach those goals, we need to have a plan for our money.

When I talk about retirement there is always someone who says, “Andres, that is why I had eight children. Each kid is going to send me $500 per month!” We Latinos are known for having big families, but this should not be your financial plan!

The truth is, most people aren’t thinking about the future. They are just trying to survive. But when you think about your goals for the future, living on a budget and saving are no longer sacrifices. They are the tools you use to achieve your goals.

Step One: Save for Emergencies

We save money for three reasons: emergencies, cash purchases and long-term savings like retirement and college funding. Today, we’ll focus on saving for emergencies.

Do you realize that 90 percent of life’s emergencies can be covered with a $1,000 emergency fund? People live in crisis mode all the time because they don’t even have a thousand bucks.

Suppose your alternator in your car goes out. Facing a crisis like that without an emergency fund means you don’t just have a transportation problem. You also have a money problem and maybe even a marriage problem.

Stop living in crisis mode! With your $1,000 emergency fund, you simply fix the car.

Saving $1,000 for emergencies is the first step in your financial plan — what we Latinos call el colchón financiero. Saving $1,000 doesn’t have anything to do with how much money you make. So start today by writing down your plan to save $1,000 in 30 days.You’ll see for yourself that by having a plan and making saving a priority, you can achieve your financial goals!

Andrés joined forces with Dave Ramsey to bring this message of Financial Peace to the Hispanic community. Through his radio program "El Show de Andres Gutierrez" and the course "Financial Peace," he is helping the Hispanic community make their money work for them - one family at a time. For more information about Andres Gutierrez visit www.andresgutierrez.com. Follow him on Twitter: @ elshowdeandres and Facebook.com/elshowdeandres.

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