Financial literacy is often treated as the missing step toward building wealth; however, knowledge alone may not be enough for many Latino households. With Hispanic Heritage Month just days away, findings from a 2025 Pew Research Center survey showing that 63% of U.S. Latinos described their finances as only fair or poor, paired with financial literacy reaching a 10-year low, make it worth understanding how Latino families can actually create wealth.

Financial Knowledge Is Only Part Of The Equation

As I have previously reported , financial education can teach people how to manage money, but it cannot by itself create disposable income, eliminate family financial obligations or change the experiences that influence how people respond to risk, debt and financial uncertainty. The TIAA Institute-GFLEC Personal Finance Index measures knowledge across areas including earning, consuming, saving, investing, borrowing, insurance, and risk. In its 2026 report, researchers found that financial literacy among U.S. adults had fallen to its lowest level since the index began in 2017.

Education, however, does not necessarily translate into financial capacity. Pew Research Center found that 35% of Latinos surveyed in 2025 had struggled to afford food during the previous year, while 30% had struggled with medical care and another 30% with rent or mortgage payments. About 48% had experienced difficulty paying for at least one of those three necessities. Even employment did not eliminate the strain: 30% of Latinos working full-time reported difficulty paying their rent or mortgage. A household can therefore understand the importance of maintaining an emergency fund while lacking enough money to create one.

Acknowledging Past Experiences And Family Obligations Is Key To Building Wealth

As building wealth requires acknowledging that financial decisions are not made in a vacuum, it is fair to ask what else is involved. The experiences people have with money and the responsibilities they carry for others can influence what they do with their income even after their earnings increase.

TIAA Institute research on Hispanic financial wellness found that even Hispanics earning more than $200,000 annually faced challenges related to saving, investing, and retirement readiness. Researchers also identified complex multigenerational financial dynamics among participants, including the expectation that some would help support their parents in retirement.

In practice, those responsibilities can reshape what a high income actually provides. Someone may be contributing to a parent’s housing or healthcare costs while also trying to fund a 401(k), build an emergency account and invest for the future. Others may become the person relatives turn to when an unexpected bill or financial emergency arises. In those cases, money that might otherwise go toward long-term wealth building can instead become part of an informal family safety net.

This is where conversations around financial trauma can add another layer to the wealth-building discussion. Past experiences with scarcity, instability, or financial loss can influence how safe a person feels with money and how much financial responsibility they believe they must carry for others. For some Latinas, that can mean examining not only how they manage money, but also what they believe money requires of them.

Supporting family and building personal wealth do not have to be opposing goals, but creating financial stability under those conditions may require setting boundaries around what can be given away, determining how much can be sustainably allocated to family responsibilities and protecting money for one’s own emergency savings, retirement and investments.

A Path To Approach Money Within The Latino Community

While financial literacy remains essential, improving financial stability and consequently wealth requires approaching money as more than an educational problem. Consider a Latina professional whose mother has always told her, “Don’t leave the steady job.” The advice comes from a place of care: a reliable paycheck, health insurance and job security can feel especially valuable in a family that has experienced financial instability. But what happens when that same job leaves little time to pursue a higher-paying opportunity, grow a side business or develop new skills? And what if part of that paycheck is also helping a parent with bills or covering an unexpected family expense? In that situation, building wealth is not simply about knowing that she should save or invest more. It means deciding which forms of security still serve her, which financial responsibilities she can realistically carry and when holding on to what feels safe may be limiting her ability to earn more.

Increase income, along with financial knowledge

There is a limit to how much someone can budget when income barely covers essential expenses. Increasing earning power has to remain part of the wealth-building conversation. That could mean negotiating compensation, developing new skills, pursuing entrepreneurship, or creating additional sources of income. As I have previously reported , side hustles and entrepreneurship have become tools some Latinas are using to create greater financial stability. The goal, however, should not simply be earning more. Additional income needs a destination, whether that is an emergency fund, debt reduction, retirement, or investing.

Start the money conversation as early as possible

Every other Hispanic house has listened to a variation of the “Adults know better and will provide for the family” as response when a child is asking about money. However, talking to children about money can also force adults to confront their own relationship with it. Acorns’ 2026 Money Matters for Kids Report found that 1 in 3 parents had avoided money conversations because of their own financial situation, experiences, or habits. The survey also found that 57% said discussing subjects including drugs, alcohol, puberty, or sex would be easier than discussing finances. Children, meanwhile, are already learning about spending, or saving, or money in general, from the world around them. Creating space for age-appropriate conversations about income, budgeting, saving, and investing can help make money less taboo for the next generation.

Question inherited beliefs about money

Financial education should include more than learning definitions. Families can examine beliefs such as whether debt is always necessary to obtain something they want, whether having available credit means it should be used or whether investing is inherently too risky. The objective is not to replace one rigid rule with another. It is to understand the difference between a financial tool and a financial habit. Credit, for example, can be useful when managed intentionally, but it should not become a substitute for income or savings.

Talk openly about the numbers

Credit, debt, income, savings and investing should not become topics that families discuss only when something goes wrong. Knowing how much comes in, how much is owed, how much has been saved and where money is being invested creates a clearer picture of financial health. Greater transparency can also give younger generations practical examples of financial decision-making rather than leaving them to learn exclusively through social media or trial and error.

Create boundaries around family financial support

Helping relatives can be an important personal and cultural priority, but sustainable support requires limits. One approach is to treat family assistance as an intentional part of the household budget rather than an unlimited emergency fund. Deciding in advance how much can be contributed and which financial goals must remain protected can make it possible to support others without continually postponing one’s own wealth-building.

Financial literacy remains an important foundation for building wealth, but the data and experiences explored here suggest that knowledge alone cannot solve every barrier Latino families face. Limited financial capacity, past experiences with money, multigenerational obligations and deeply held beliefs can all influence whether financial knowledge translates into action. Building wealth therefore requires a broader approach including increasing income, talking about money earlier and more openly, questioning inherited financial beliefs, and creating clearer boundaries around family support. Financial education can explain the tools, but long-term financial stability depends on whether families have the resources, confidence, and space to use them.

Alejandra Rojas is the founder of Brown Way To Money , a financial education platform, and the host of the Brown Way To Money podcast . Alejandra blends financial strategy with a trauma-informed approach to guide business owners toward financial stability.

The opinions expressed in this article are not intended to replace professional financial, tax, or accounting advice.