Friday, Mar. 14, 2008

'Se Habla Dinero?' offers financial guide to Latinos

Do you speak money? That's the query behind a new personal finance book aimed at Latinos, "Se Habla Dinero? The Everyday Guide to Financial Success."

Written by Lynn Jimenez, a longtime KGO radio (810 AM) business reporter in San Francisco, the bilingual book covers financial topics — buying, saving and investing — that speak to consumers in any language. Between her on-air stints last week, we caught up with Jimenez by phone to talk about managing money.

Q. What motivated you to write this book?

A. With what I've learned covering business at KGO for the last 17 years, there was never enough time to get all the information out in one-minute radio segments. And there are a lot of people who need translation ... not just from English to Spanish or vice-versa, but translation of financial and economic terms into everyday language they can understand. If we're going to be successful as a nation ... and as a state, we have to be sure everybody understands how to take care of themselves financially.

Q. Who's your audience? Is it first-generation Latinos and their families or a broader audience?

A. There's a big gap in financial literacy among Hispanics. Studies have shown that they have a great deal of financial illiteracy ... but those studies also found that once Hispanics have the financial facts of life, they tend to adhere to them and use them more appropriately. Every time I sat down in front of my computer screen to write, I saw a Hispanic family, three generations sitting around the kitchen table: Grandma doesn't speak any English and hides her money in the mattress. The parents speak some English and their kids speak both, a sort of Spanglish. They want to start a small business. They want to buy a house. They want to pay for their kids' college. ... But when I took it to book signings, it was the most amazing thing. At the Book Passage in Corte Madera (Calif.) last month, it was mostly Marin-ites (residents of upscale Marin County), and they were buying multiple copies. They said they want their kids to understand money. And they want their (Spanish-speaking) nannies who are tutoring their kids to understand money. So it's bilingual, it's bicultural and it's bigenerational.

Q. What influences in your own family convinced you of the need for financial fluency?

A. I'm third-generation. ... My family owned a theatrical supply store and a trophy shop in San Francisco. We all worked in the family business. We learned how to count cash, how to do inventory, how to clean toilets, how to deal with the public — all the things you need to learn in running a small business. But there were also gaps in my parents' knowledge. We didn't come from Ivy League. We didn't have financial advisers. When I was going to college, we didn't know a lot about loans, financial aid and scholarships. We weren't familiar with that ... and there was a certain distrust by my parents in putting all that personal information into financial forms. ... I don't want others to have to wait so many years to take advantage of the opportunities that the U.S. economy offers.

Q. What are the cultural or ethnic barriers that keep Hispanics from feeling comfortable discussing money?

A. The first lesson you learn at home is never discuss what your paycheck is outside the family, no matter what. ... Very often, especially for new arrivals or first-generation, they're paralyzed by fear: fearful of making the wrong decision, fearful of appearing ignorant to outsiders by having to ask questions, fearful of displaying to their family they don't know something when they're supposed to be the leader.

Q. Suze Orman and other high- profile financial advisers often harp on the fact that so many of us spend beyond our means, trying to impress other people. Do you see that as a particularly American — or even more specifically, a Californian — trait?

A. It's across the country. We've all got this idea that to fit in with your peers, you whip out your credit card. ... I tell people that a credit card is like fire: It can warm you; it can burn you. Use cash when you can, so you know what's going out and what's coming in. Stop and think about what you're buying: Do I need it, and will I be happy when I buy it? I'm not telling people they should walk to work, in the rain, with holes in their shoes. But it's fairly simple to use common sense.

Q. I was especially taken with your book's emphasis on higher education, particularly in light of statistics showing a low percentage of Hispanics in four-year universities and colleges. Why is that important to you?

A. If you're a college graduate, you can earn — over a lifetime — about $1.5 million more than someone with only a high school education. You're able to invest more in your children's education. You're able to save more for your own retirement. That's true whether you go to school to be an auto mechanic or anything else. But it's not just about the money. The more you improve yourself, the more you enhance your life.

Q. Your book addresses some of the language confusion that arises with financial terms. For instance, a "notario" in Mexico is an attorney, but in the United States, a "notary" is someone who confirms your valid signature on a legal document. How much of our financial fluency is tied to our English fluency? A. It's not tied to the language per se. A lot of it's tied to the fact that no one in the U.S. gets a good grounding in financial education. Everyone has a blind spot in our financial literacy. Even after 17 years (as a business reporter), there were things I found in doing my book research that I didn't know. ... I didn't know the IRS had a Spanish-English glossary of tax terms. (It's IRS Publication 850 and can be ordered free by phone at (800) 829-3676 or downloaded at www.irs.gov.)

Q. Let's talk about the American dream: homeownership. You actually state that it's not necessarily for everyone. That would have been good advice for a lot of folks who got into subprime loans.

A. There's a big difference between what you can qualify for vs. what you can afford. Obviously, if you can't afford a mortgage, it's in your best interest to rent because that's how you can afford to keep a roof over your head. If you're moving every three years, or have a miserable credit history, a home loan is going to cost you considerably. ... Owning a home — at any cost — is not the American dream, not when the cost is foreclosure or bankruptcy.

Q. What's your advice, then?

A. Spend a year or so cleaning up your credit history before getting into a mortgage. It'll cost you less.