Minorities saving more for their kids’ future
Whether people send money abroad or to a family member that lives within the U.S., they often do so because they love them and want them to live more comfortably. And as a new study shows, many minorities today are also putting more of their money away for their loved ones to use at a later time so that they won't have to worry about medical expenses once they get older and are in need of care.
The report, which was conducted jointly by the State Farm Center for Women and Financial Services as well as the American College of Financial Services, found that six in 10 women of color save money for retirement, primarily so that they won't be a financial burden for their kids should they become infirm in their latter years.
What was particularly noteworthy was the way in which women are saving and how they saved depending on their ethnic background and economic status. For example, the report found that Asian women who earned more than $75,000 per year made saving more of a priority than did women of the same ethnicity but whose annual salary was less.
This shouldn't suggest, however, that people who earn less aren't just as concerned about saving money for their children once they become adults. The poll also found that regardless of personal economic circumstances, women found a variety of ways in which to save money.
Sophia Duffy assistant professor of employee benefits at The American College, noted that defined benefit company pension plans are becoming less frequent number, mainly because employer are cutting them in order to save on costs.
"Personal savings must be encouraged if individuals are to achieve financial security in retirement," said Duffy.
Cost of living heavy load for many minorities
Another potential reason for why many minorities are putting an emphasis on saving for their kids may stem from the cost of living. According to a newly released report, which was conducted jointly by the Poverty and Race Research Action Council as well as the National Low Income Housing Coalition, close to 50 percent of today's African American and Hispanic families face challenges when it comes to housing costs.
Based on cost of living calculations and average salaries, NLIHC indicates that someone who who works at least 30 to 40 hours per week has to earn approximately $19 an hour if they want to rent out a two-bedroom apartment affordably. Housing experts say that, ideally, no more than one-third of an individual's salary should go toward rent costs.
However, approximately 48 percent of African American families do not have the type of income they would need to fulfill this ideal. A similar percentage – 46 percent – of Hispanics face similar financial straits.
Phillip Tegeler, president of the PRRAC, indicated that these results are truly sobering and ought to send a message to legislators that more needs to be done to support hard working Americans who are making less than they're worth.
"Finding affordable housing is a challenge for all low-income Americans, but our analysis demonstrates it is even more burdensome for families of color," said Tegeler. "This should be a wake-up call for the administration and Congress that addressing housing costs, and creating more affordable housing, must be a national priority."
The NLIHC recently released a separate report on how many hours the average person has to work in order to afford an apartment. Some of the best places were in the Midwest – such as North Dakota, South Dakota and Kansas – as low rent rates enabled renters to do more with their money while spending less time on the job.