With October being Financial Planning Month, a group of financial advisors have urged locals to start saving money to purchase a home, citing Orlando’s skyrocketing housing prices.
Last week, the group specifically referenced Hispanic families, which make up over one-third of Orlando’s population.
“Orlando home values are up more than 70% since the start of the pandemic,” a message from Northwestern Mutual said. “(We are) working to increase awareness of the importance of financial planning among Hispanic and Latino communities, where the discussion of money and saving for a down payment can still be a taboo topic in some families.”
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Northwestern Mutual is a financial planning group. Established in 1857, it is one of the oldest of its kind in the U.S.
Felipe Andrés Navarrete, managing director of Northwestern Mutual-Lake Nona, said that, for most workers, the best chance at accumulating wealth for retirement lies in homeownership. ‘
But, for some families, he said, getting started with the process to plan for wealth might require breaking some outdated traditions.
“In many families, you may see parents or grandparents not wanting to disclose their income, not wanting to disclose how much money they have in savings. And we’re entering a period where finances are very important, and they have to be scrutinized,” he said. “I think it’s time for us to start educating, to start teaching our children about our finances — you know, be vulnerable, and show your next generation the mistakes you’ve made.”
Navarrete said financial literacy is one of the factors that helps determine if a family will pass on generational wealth, which is key for workers, especially as they enter older age and may need to rely on passive forms of income for future survival.
As homeownership is likely the greatest asset in a worker’s lifetime, Navarrete said, becoming able to buy is important, as the housing market grows more inaccessible for workers.
“Less and less people are able to afford owning a home, especially here in Orlando, right? Orlando has become one of those cities that has rapidly increased in value, and I think people’s incomes have not caught up with the increase in the housing market,” he said.
Navarrete said some of the best tips he can offer workers is to budget and save their money. For families who are spending 100% of their income, or might even be spending more than they bring in, Navarrete suggests, “make more money.”
While he said he understands this is “easier said than done,” he said negotiating higher wages is one of the most powerful tools workers have. Only this way, he said, could saving for a downpayment become possible.
“How do we change a metropolitan area that is growing in value but everyone is just getting paid the same?” Navarrete said. “Everyone needs to start asking for more money for their hours’ worth.”
For workers who find themselves with a little extra every month after all bills are paid, Navarrete said to “pay yourself first.” This means to give yourself a cut, maybe 10% of your income each month to put away as savings or to take the risk of investing it into more profitable opportunities.
Navarrete said Central Florida’s growth makes it particularly ripe for entrepreneurship.
“If you have the entrepreneurial spirit, go for it. These are times when you have nothing to lose,” Navarrete said. “If you feel like entrepreneurship could bring way more value to yourself monetarily than the job you have right now, then this is the time to do it. Because, remember, the more people who move into an area, the more services they’re going to need, the more products they’re going to need.”
Budgeting and saving for a downpayment, Navarrete said, are key to homeownership for workers. He said some money market accounts right now are paying up to 4.9% interest.
Some common misconceptions and bad practices include taking financial advice from social media content creators, such as “too good to be true” videos with “get rich quick” advice, according to Navarrete.
He also said taking financial advice from billionaires who are in different economic conditions than workers is also not a good idea, and he suggested against spending money that could be saved or used to start up a business.
Lillian Hernández Caraballo is a Report for America corps member.
