Hispanics spend an average of $300 less per month when compared with the general U.S. population, according to new survey results from TD Bank.
The TD Bank Saving and Spending Survey questioned more than 1,600 U.S. consumers about their saving and spending habits. The survey found the monthly spending average for Hispanics significantly lower than the general market, spending just $1,291 compared with the national average of $1,608 (excluding rent/mortgage).
“While the survey shows Hispanics are spending less than the national average, they are still struggling to save money, with 43%wishing they could save more,” said Nandita Bakhshi, Executive Vice President, Consumer Bank, TD Bank. “Managing spending and savings is a delicate balance but it can be achieved with the right plan and budget.”
Necessary Expenses and the Influence of Impulse Purchases
Hispanics are burdened with expenses they seemingly cannot escape. The survey results found that almost half (43%) of Hispanics wish they were able to save more but have unavoidable expenses, such as groceries and household utilities, which rank highest among top spending categories.
The top spending categories for Hispanics include:
• Groceries and alcohol (26% of monthly spending);
• Household utilities and bills (22% of monthly spending); and
• Loan and line of credit payments (12% of monthly spending)
In terms of extravagant spending on day-to-day items, 41% of Hispanic respondents agreed thatt they spend too much on restaurants/dining out, followed by coffee/lunches (19%) and clothing/shoes (15%).
When it comes to cutting back, the majority of Hispanics (64%) agreed they would cut back on the costs related to restaurants/dining, followed by clothing/shoes (37%) and gifts for others (35%).
Aside from necessary expenses, the survey found that Hispanics also indulge on impulse purchases. Nearly half (43%) of Hispanics claim to sometimes indulge in impulse purchases because they feel they deserve it.
Interestingly, 24% of Hispanics said they rarely spend impulsively because they try not to spend outside their budget.
Cautious with a Keen Eye on Personal Budgets
When asked to describe their financial character, nearly half (40%) of Hispanics claim their financial personality/character to be “cautious”. In regards to how often they are examining their finances, about half (48%) said they check their budget once a week to ensure they are spending within their means.
Additionally, 35% of Hispanics said they use banking/financial apps as a method to keep track of their budget.
According to the survey, Hispanics said that their parents (38%) are the biggest impact on their financial behavior followed by friends (13%). Friends and family (29%), celebrities (26%) and professional financial advisors (21%) are the ideal person(s) they would choose to discuss their finances.
Necessary Preparation for a Solid Financial Future
The survey also found that the majority of Hispanics (62%) do not have savings or investments to draw from in case of unexpected unemployment. Furthermore, 31% of Hispanics report they would be able to live comfortably for six or more months without a source of income.
Although more than half (54%) of Hispanics report that they are not currently saving or investing money for retirement, 30% claim they feel they are extremely/very confident that they will be able to retire comfortably.
“The key to reaching your financial goals, whether it’s saving money for your retirement or just planning for a rainy day, is to have a plan and stick to it,” said Bakhshi. “Having a budget will help you manage your expenses and allow you to save money and give you confidence in your financial future.”