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Hispanic Finances and Financial Services - US - March 2009

The growing Hispanic population is a diverse group with a varied set of attitudes about money. Hispanics in the U.S. come from such a variety of lifestyles and previous experiences, thus their purchasing behavior differs significantly from that of traditional U.S. consumers and even among themselves. Knowing which segment of the Hispanic population a marketer’s products and message are best suited for will go a long way in reaching this fast growing section of the U.S. market.

Readers of this report will learn:

  • Important demographics of the Hispanic consumer, including how varying levels of acculturation and income affect purchasing behaviors
  • An up to date account of the financial position of Hispanic consumers, including how spending behaviors have changed due to the current downturn in the economy
  • Insights into the significance of the underbanked Hispanic community: who they are, why they avoid banks and how financial institutions can reach them and grow their business
  • Why Hispanic consumers choose different types of financial products over others, and how marketers can craft the right messages to captivate this audience

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Sources
          • Consumer survey data
            • Abbreviations and terms
              • Abbreviations
                • Terms
                • Executive Summary

                    • Understanding the consumer
                      • Demographics
                        • Acculturation
                          • The Hispanic consumer
                            • Financial position is strong and growing
                              • Unease in today’s economy is leading to cut-backs in spending
                                • Hispanics with lower levels of acculturation overspend in certain categories
                                  • Remittances to Latin America remain an essential part of the Hispanic budget
                                    • Hispanics and money
                                      • Careful with money, untrusting of banks
                                        • A significant portion of the Hispanic population is underbanked
                                          • Frequent debit card use suggests desire for banking services
                                            • Aspirations to save, difficult realities
                                              • Home loans non-existent or source of concern
                                                • Undocumented Hispanics lack access to credit
                                                  • Hispanic finances and financial services
                                                    • A lack of knowledge and an element of interest
                                                      • The majority of Hispanics do not own any type of investment
                                                        • Hispanics prefer to make financial decisions on their own
                                                          • A variety of insurance and a variety of behaviors
                                                            • Retirement savings falls short
                                                            • Insights and Opportunities

                                                              • Banking the unbanked
                                                                • Gaining trust and credibility
                                                                  • Products and services that fit
                                                                    • Education, risk and retirement
                                                                    • Inspire Insights

                                                                        • Trend: My Financial Service
                                                                          • What’s it about?
                                                                            • Trend: The End of Easy Credit
                                                                              • What’s it about?
                                                                                • Assessing risk
                                                                                  • Personal risk
                                                                                    • The new normal
                                                                                    • U.S. Hispanic Population

                                                                                        • Demographic data
                                                                                          • U.S. Hispanic population
                                                                                            • U.S. population by race/Hispanic origin
                                                                                              • Figure 1: Population by race/Hispanic origin, 1970-2020
                                                                                              • Figure 2: Asian/Pacific Islander, Black, and Hispanic populations, 1940-2020
                                                                                              • Figure 3: Population, by race and Hispanic origin, 2003-13
                                                                                            • Age
                                                                                              • The Hispanic and non-Hispanic population by age
                                                                                                • Figure 4: Hispanic population, by age, 2003-13
                                                                                                • Figure 5: Total U.S. population, by age, 2003-13
                                                                                              • Generations
                                                                                                • Hispanics by generation
                                                                                                  • Figure 6: Generations, by Hispanic origin, 2008
                                                                                                • The Hispanic household
                                                                                                  • Figure 7: Average household size, by Hispanic origin/race of householder, 2001 and 2006
                                                                                                  • Figure 8: Households, by number of persons in the household—Hispanics vs. non-Hispanics 2006
                                                                                                  • Figure 9: Households, by presence of children and Hispanic origin, 2006
                                                                                                • Hispanic fertility rate
                                                                                                  • Figure 10: Fertility rate, by race and Hispanic origin of mother, 1996-2006
                                                                                                • Country of origin/heritage
                                                                                                  • Figure 11: Hispanic population, by country of origin/heritage, 2007
                                                                                                  • Figure 12: Graph: Hispanics, by country of origin/heritage, 2007
                                                                                                • Geographic location
                                                                                                  • Hispanics by geographic concentration
                                                                                                    • Figure 13: Graph: Hispanic population, by region and by country of origin/heritage, 2007
                                                                                                    • Figure 14: Hispanic population, by region and by country of origin/heritage, 2007
                                                                                                  • States with greatest Hispanic population growth
                                                                                                    • Figure 15: Hispanic population greatest percentage increase, 2001-06
                                                                                                  • Key Hispanic metropolitan areas
                                                                                                    • Figure 16: Metropolitan areas with the largest number of Hispanic residents, by country of origin, 2006
                                                                                                • Acculturation

                                                                                                    • What is acculturation?
                                                                                                      • Why is level of acculturation important?
                                                                                                        • Unacculturated/Enculturated
                                                                                                          • Acculturated/Bicultural
                                                                                                            • Assimilated
                                                                                                                • Figure 17: Hispanics, by acculturation and assimilation level, 1998-2008
                                                                                                              • What is retro-acculturation?
                                                                                                                • Retro-acculturation
                                                                                                                • The Hispanic Consumer

                                                                                                                  • Hispanic purchasing power
                                                                                                                    • Hispanic purchasing power on the upswing
                                                                                                                      • Figure 18: Purchasing power, by race/Hispanic origin, 2007
                                                                                                                    • Hispanic income
                                                                                                                      • But Hispanics lag in U.S. household income distribution
                                                                                                                        • Figure 19: Median household income, by race and Hispanic origin of householder, 2007
                                                                                                                        • Figure 20: Household income distribution, by race and Hispanic origin of householder, 2007
                                                                                                                      • Hispanic household earners
                                                                                                                          • Figure 21: Number of household earners, by income level, December 2008
                                                                                                                        • Income earners by language preference at home
                                                                                                                            • Figure 22: Number of household earners, by language preference, December 2008
                                                                                                                          • Hispanic income levels concentrated in key states
                                                                                                                            • Figure 23: Largest Hispanic markets, by Hispanic disposable income, 2005
                                                                                                                          • Hispanics and the economy
                                                                                                                            • Hispanics in today’s economy
                                                                                                                                • Figure 24: Hispanics now looking for deals/sales more than they did a year ago, by household income, December 2008
                                                                                                                                • Figure 25: Hispanic attitudes towards personal finances, by household income, December 2008
                                                                                                                              • Hispanics’ economic outlook
                                                                                                                                  • Figure 26: Hispanics who describe the U.S. as a land of opportunity, by household income, December 2008
                                                                                                                                • Remittances to Latin America
                                                                                                                                  • Providing for the family
                                                                                                                                    • Figure 27: Hispanic attitudes towards personal finances, by language preference, December 2008
                                                                                                                                  • Younger Hispanics send more
                                                                                                                                    • Figure 28: Hispanic attitudes towards personal finances, by age group, December 2008
                                                                                                                                  • Decrease in remittances
                                                                                                                                    • Remittances and banks
                                                                                                                                        • Figure 29: Western Union television ad, “We Are With You”, February 2008
                                                                                                                                      • Hispanics’ category expenditures
                                                                                                                                        • Figure 30: Expenditures by category, by Hispanic origin of consumer unit reference person, 2007
                                                                                                                                      • Household grocery spending
                                                                                                                                        • Spending by race/Hispanic origin
                                                                                                                                          • Figure 31: Average spent on groceries per week by race/Hispanic origin, July 2007-September 2008
                                                                                                                                        • Spending by household income
                                                                                                                                            • Figure 32: Household grocery expenditure by income level, Hispanic vs. non-Hispanic, July 2007-September 2008
                                                                                                                                          • Hispanic spending by language preference
                                                                                                                                              • Figure 33: Hispanic average spent on groceries, by language preference when reading, July 2007-September 2008
                                                                                                                                          • Hispanics and Money

                                                                                                                                              • Attitudes towards money
                                                                                                                                                • By race/Hispanic origin
                                                                                                                                                  • Figure 34: Attitudes towards money, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                • Hispanics by income level
                                                                                                                                                  • Figure 35: Hispanics’ attitudes towards banking by household income level, July 2007-September 2008
                                                                                                                                                • Hispanics by place of birth
                                                                                                                                                  • Figure 36: Hispanic attitudes towards banking, by place of birth, July 2007-September 2008
                                                                                                                                                • Banking
                                                                                                                                                  • Banking and investment use by race/Hispanic origin
                                                                                                                                                    • Figure 37: Banking and investment services preferred by Hispanics and non-Hispanics, July 2007-September2008
                                                                                                                                                  • Hispanics by income level
                                                                                                                                                    • Figure 38: Banking services prefered by Hispanics and non-Hispanics, by income, July 2007-September 2008
                                                                                                                                                  • Hispanics by place of birth
                                                                                                                                                    • Figure 39: Hispanics’ banking behavior, by place of birth, July 2007-September 2008
                                                                                                                                                    • Figure 40: Wachovia Bank television commercial, “ Way2save”, September 2008
                                                                                                                                                  • Hispanics’ usage of debit cards
                                                                                                                                                    • By race/Hispanic origin
                                                                                                                                                      • Figure 41: ATM/debit card ownership, by race/Hispanic origin, July-September 2008
                                                                                                                                                      • Figure 42: ATM/debit card usage frequency, by race/Hispanic origin, July 2007-September2008
                                                                                                                                                    • Hispanics by level of acculturation
                                                                                                                                                      • Figure 43: ATM/debit card ownership, by Hispanic language preference, July 2007-September 2008
                                                                                                                                                    • Savings, the new priority
                                                                                                                                                      • Savings by race/Hispanic origin
                                                                                                                                                        • Figure 44: Ownership of savings vehicles, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                      • Saving habits of Hispanics by income
                                                                                                                                                        • Figure 45: Currently saving money for variious items, by household income, December 2008
                                                                                                                                                      • Saving habits of Hispanics by language preference
                                                                                                                                                        • Figure 46: Currently saving money for the following items, by Hispanic language preference, December 2008
                                                                                                                                                      • Savings habits of Hispanics by age
                                                                                                                                                        • Figure 47: Currently saving money for the following items, by Hispanic language preference, December 2008
                                                                                                                                                      • Loans and the Hispanic consumer
                                                                                                                                                        • Loans by race/Hispanic origin
                                                                                                                                                          • Figure 48: Loan ownership, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                        • Loans by Hispanic household income
                                                                                                                                                          • Figure 49: Hispanic loan ownership, by household income July 2007-September 2008
                                                                                                                                                        • Loans by language preference when reading
                                                                                                                                                          • Figure 50: Hispanic loan ownership, by language preference when reading, July 2007-September 2008
                                                                                                                                                          • Figure 51: Wells Fargo Bank television ad, Mortgages, May 2008
                                                                                                                                                        • Hispanics’ usage of credit cards
                                                                                                                                                          • Figure 52: Consumer credit outstanding, percentage change, 2007
                                                                                                                                                        • Credit card acquisition by race/Hispanic origin
                                                                                                                                                          • Figure 53: Credit card ownership, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                        • Hispanic credit card debt
                                                                                                                                                          • Figure 54: Credit card payment behavior, by race/Hispanic origin, November 2008
                                                                                                                                                        • Hispanic credit card debt by income level
                                                                                                                                                          • Figure 55: Hispanic ownership of credit cards, by income level, July 2007-September 20008
                                                                                                                                                        • Hispanic credit card debt by language spoken at home
                                                                                                                                                          • Figure 56: Hispanic attitudes towards their credit card debt, by language preference, December 2008
                                                                                                                                                          • Figure 57: Visa television ad, “Life takes Visa”, May 2008
                                                                                                                                                      • Hispanic Finances and Financial Services

                                                                                                                                                        • Finances and financial services
                                                                                                                                                          • Hispanics’ attitudes towards finances and financial services
                                                                                                                                                            • Investments by race/Hispanic origin
                                                                                                                                                              • Figure 58: Attitudes towards finances, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                            • Hispanics’ investment by language preference
                                                                                                                                                              • Figure 59: Attitudes towards finances, by language preference in the home, July 2007-September 2008
                                                                                                                                                            • Hispanics’ investments by income level
                                                                                                                                                              • Figure 60: Attitudes towards finances, by race/Hispanic origin and income level, July 2007-September 2008
                                                                                                                                                            • Investment products
                                                                                                                                                              • Investments by race/Hispanic origin
                                                                                                                                                                • Figure 61: Investment ownership, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                              • Hispanics’ investments by income level
                                                                                                                                                                • Figure 62: Investment ownership, by race/Hispanic origin and income level, July 2007-September 2008
                                                                                                                                                                • Figure 63: Prudential retirement television ad, October 2008
                                                                                                                                                              • Financial decisions
                                                                                                                                                                • Financial services used by Hispanics, by income
                                                                                                                                                                  • Figure 64: Hispanic financial decisions, by income level, December 2008
                                                                                                                                                                • Financial services used by Hispanics by educational attainment
                                                                                                                                                                  • Figure 65: Hispanic financial decisions, by education level, December 2008
                                                                                                                                                                • Hispanics and insurance products
                                                                                                                                                                  • Health insurance
                                                                                                                                                                    • Health insurance by race/Hispanic origin
                                                                                                                                                                      • Figure 66: Ownership of health insurance, by race/Hispanic origign, July 2007-September 2008
                                                                                                                                                                      • Figure 67: Means of obtaining Health insurance by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                                    • Hispanics’ health insurance by income
                                                                                                                                                                      • Figure 68: Ownership of health insurance, by race/Hispanic origign, July 2007-September 2008
                                                                                                                                                                      • Figure 69: Means of obtaining Health insurance, by race/Hispanic origin and income level, July 2007-September 2008
                                                                                                                                                                    • Life insurance
                                                                                                                                                                      • Life insurance by race/Hispanic origin
                                                                                                                                                                        • Figure 70: Ownership of life insurance, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                                      • Hispanic life insurance by income
                                                                                                                                                                        • Figure 71: Ownership of life insurance, by race/Hispanic origin and income level, July 2007-September 2008
                                                                                                                                                                        • Figure 72: Value of life insurance, by race/Hispanic origin and income level, July 2007-September 2008
                                                                                                                                                                        • Figure 73: Ownership of life insurance by language preference in the home, July 2007-September 2008
                                                                                                                                                                      • Automotive insurance
                                                                                                                                                                        • Automotive insurance by race/Hispanic origin
                                                                                                                                                                          • Figure 74: Ownership of auto insurance, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                                          • Figure 75: Value of auto insurance, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                                        • Hispanics’ automotive insurance by income
                                                                                                                                                                          • Figure 76: Value of auto insurance, by race/Hispanic origin and income level, July 2007-September 2008
                                                                                                                                                                        • Home insurance
                                                                                                                                                                          • Home insurance by race/Hispanic origin
                                                                                                                                                                            • Figure 77: Ownership of home insurance, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                                          • Hispanics’ home insurance by income
                                                                                                                                                                            • Figure 78: Value of home insurance by race/Hispanic origin and income level, July 2007-September 2008
                                                                                                                                                                          • Planning for retirement
                                                                                                                                                                            • Retirement savings
                                                                                                                                                                              • Pensions by race/Hispanic origin
                                                                                                                                                                                • Figure 79: Ownership of 401(k) accounts, by race/Hispanic origin, July 2007-September 2008
                                                                                                                                                                              • Hispanics’ pension savings by income
                                                                                                                                                                                • Figure 80: Ownership of 401(k) accounts, by race/Hispanic origin and income level, July 2007-September 2008
                                                                                                                                                                              • Attitudes towards retirement planning
                                                                                                                                                                                • Pension by race/Hispanic origin
                                                                                                                                                                                  • Figure 81: Attitudes towards retirement, by race/Hispanic origin and income level, July 2007-September 2008
                                                                                                                                                                              • Cluster Analysis

                                                                                                                                                                                  • Crunchers
                                                                                                                                                                                    • Who they are
                                                                                                                                                                                      • Opportunity
                                                                                                                                                                                        • Buyers
                                                                                                                                                                                          • Who they are
                                                                                                                                                                                            • Opportunity
                                                                                                                                                                                              • Retirees
                                                                                                                                                                                                • Who they are
                                                                                                                                                                                                  • Opportunity
                                                                                                                                                                                                    • Cluster characteristics
                                                                                                                                                                                                      • Figure 82: Hispanics and budgeting clusters, January 2009
                                                                                                                                                                                                      • Figure 83: Level of credit card debt, by Hispanics and budgeting clusters, January 2009
                                                                                                                                                                                                      • Figure 84: Expenditure behavior on non-essentials, by Hispanics and budgeting clusters, January 2009
                                                                                                                                                                                                      • Figure 85: Seeking sales and deals, by Hispanics and budgeting clusters, January 2009
                                                                                                                                                                                                      • Figure 86: Attitudes towards finances, by Hispanics and budgeting clusters, January 2009
                                                                                                                                                                                                      • Figure 87: Reasons for savings, by Hispanics and budgeting clusters, January 2009
                                                                                                                                                                                                    • Cluster demographics
                                                                                                                                                                                                      • Figure 88: Hispanics and budgeting clusters, by gender, January 2009
                                                                                                                                                                                                      • Figure 89: Hispanics and budgeting clusters, by age group, January 2009
                                                                                                                                                                                                      • Figure 90: Hispanics and budgeting clusters, by income group, January 2009
                                                                                                                                                                                                      • Figure 91: Hispanics and budgeting clusters, by language dominance, January 2009
                                                                                                                                                                                                      • Figure 92: Hispanics and budgeting clusters, by place of birth, January 2009
                                                                                                                                                                                                    • Cluster methodology
                                                                                                                                                                                                    • Appendix: Simmons

                                                                                                                                                                                                        • Figure 93: Hispanics banking behavior, by language preference in home, July-September 2008
                                                                                                                                                                                                    • Appendix: Other Useful Consumer Tables

                                                                                                                                                                                                        • Figure 94: Hispanics who describe the U.S. as a land of opportunity, by language preference, December 2008
                                                                                                                                                                                                        • Figure 95: Hispanics who describe the U.S. as a land of opportunity, by household income, December 2008
                                                                                                                                                                                                    • Appendix: Trade Associations

                                                                                                                                                                                                      Companies Covered

                                                                                                                                                                                                      • Federal Reserve System
                                                                                                                                                                                                      • Inter-American Development Bank
                                                                                                                                                                                                      • MoneyGram International, Inc.
                                                                                                                                                                                                      • Morningstar, Inc.
                                                                                                                                                                                                      • PricewaterhouseCoopers
                                                                                                                                                                                                      • Prudential Financial, Inc
                                                                                                                                                                                                      • U.S. Bureau of Labor Statistics
                                                                                                                                                                                                      • Visa U.S.A. Inc.
                                                                                                                                                                                                      • Walmart Stores (USA)
                                                                                                                                                                                                      • Wells Fargo & Company
                                                                                                                                                                                                      • Western Union Holdings, Inc
                                                                                                                                                                                                      • Whole Foods Market Inc

                                                                                                                                                                                                      Hispanic Finances and Financial Services - US - March 2009

                                                                                                                                                                                                      £3,174.67 (Excl.Tax)