How To Set Money Boundaries With Loved Ones, According To A Financial Coach

Once a year, America acknowledges the egregious pay gap in which Latinas earn just 67 cents for every dollar a non-Latinx white man makes. It’s time we interrogate this fact  year-round. The L-Suite examines the diverse ways in which Latinx professionals have built their careers, how they’ve navigated notoriously disruptive roadblocks, and how they’re attempting to dismantle these obstacles for the rest of their communities. This month, we're talking with financial coach and commercial litigation attorney Cindy Zuniga-Sanchez about carrying the financial burdens of loved ones, overcoming a scarcity mindset, and more.

Financial disasters can strike anyone, but Latinas, who are more likely to live below the poverty line than their white counterparts, are at a particular disadvantage. On average, Latinas earn just $0.55 for every dollar made by a non-Latinx white man, leaving them with the widest pay gap of women in all other racial and ethnic groups. This reality leads to significant losses: As a result of the wage gap, Latinas stand to lose $1,163,920 during the course of a 40-year career. Even when they make efforts to climb the economic ladder by asking employers for raises or promotions, they face barriers. According to a recent study by Lean In, for every 100 men promoted to manager, 71 Latinas will advance. Even more, regardless of their position or income, Latinas are less likely to have received financial guidance. Thus, they’re more likely to make money mistakes with devastating long-term costs.

But Cindy Zuniga-Sanchez is looking to change that by helping Latinas in an arena she believes can make an impact: education. In 2018, the Ecuadorian-Honduran money expert launched Zero-Based Budget, a social media platform and coaching business where she teaches people, particularly women of color, insight about debt, savings, investing, and more. She also works with clients to create goal-oriented financial plans and budgets. Born and raised to a low-income immigrant family in the Bronx, New York, Zuniga-Sanchez understands many of the struggles and cultural responsibilities that her clients face, and having paid off $215,000 of college debt in four years, she is eager to share her knowledge with a community striving to overcome barriers to wealth building.

“The nuanced approach I bring is that I know the concerns of my community because I have lived them. I can provide a candid, non-filtered space to talk about those topics,” Zuniga-Sanchez tells Refinery29. “My biggest goal is to uplift women, specifically women of color, to be confident with their money and in the choices that they are making for their money tomorrow.”

We asked the finance professional about the biggest challenges and concerns Latinas have around money management. From struggling to set monetary boundaries with loved ones to a deep-rooted distrust in financial institutions, Zuniga-Sanchez identifies key issues and offers solutions ahead. 

"When we are in high school, all our parents want for us is to go to college and achieve 'the American dream.' This immigrant dream involves an Ivy League or a private institution, and unless you have a full scholarship or the financial means, this comes with a lot of debt,” says Zuniga-Sanchez. "Most of my clients went to private or prestigious universities, thinking that debt wouldn't be a big deal, but now have these six-figure debts and an entry-level job that doesn't pay them enough. This is a huge problem for us, but it's not one people want to talk about, so there’s shame and confusion around it."

For those graduating from colleges with $100,000 debts and receiving $50,000 salaries, the financial coach wants us to first assess our income, savings, and debt. Once you have an understanding of this evaluation, she suggests looking into loan forgiveness programs. Many people are unaware that they are eligible for forgiveness of up to thousands of dollars. From there, Zuniga-Sanchez advises creating a plan to pay off the loans. She stresses that monthly payments must be more than the interest accruing. If not, your installments will only go toward paying off interest and will never lower your student loan amount. “This is the most common problem I see and the biggest source of frustration for people,” says Zuniga-Sanchez. If you can’t afford to increase your monthly payment, she urges cutting expenses or building new streams of income.

“My parents still live in the same one-bedroom apartment in the Bronx that they moved into when they got married 47 years ago. As a daughter, I have a duty to provide for them, and that same feeling of responsibility is common in my clients. But the reality is that this is really tough,  especially when you have an entry-level salary and are in a difficult financial position yourself,” Zuniga-Sanchez says.

Instead of digging yourself further into debt to save others or feeling guilty about not being able to help — which is a feeling far too familiar for children of immigrants — Zuniga-Sanchez suggests setting financial boundaries with your loved ones.

“If you help your parents with rent, have a set amount that you’ll give them each month so that they know what to expect and that you’re able to properly budget. If a relative lost their income and is looking to the family for help, offer what you can, but be clear about how you will help. Tell them, ‘I can send you $20 every month for the next four months.’ These conversations may not be comfortable, but they’re healthy,” she adds.

According to the Federal Deposit Insurance Corporations (FDIC), 12 percent of Latinx households are unbanked. Zuniga-Sanchez says this problem — which also impacts other communities of color — exists because of a valid distrust in financial institutions. 

“Historically, the financial services industry was not made for us. It was made for rich white men with property. The distrust starts there but also resonates in banks refusing to rent mortgages to Black and Latinx communities and giving them higher interest rates,” says Zuniga-Sanchez. “There are endless reports on the blatant racism and discrimination that has occurred from the financial services to communities of color, and when you have that, especially among Latinos, there’s this idea that ‘I can protect my money’ or ‘my money is safest with me.’”

The problem with this, Zuniga-Sanchez says, is that most of us aren’t saving our way to a million dollars. To see that kind of capital in your lifetime and beat inflation, she says you have to invest your money and trust financial institutions in holding your money and managing it. According to the financial pro, it’s all about exploring your banking options and finding the account that’s right for you — but it all comes down to education and trust.

Many people who grow up in low-income homes develop a scarcity mindset, believing that there will never be enough money. According to Zuniga-Sanchez, this can keep people from making smart and favorable investments. It’s a struggle that, even as a financial expert, she experiences at times today. “Before I am an attorney with a high-income level, I am the daughter of immigrants from a low-income neighborhood in the Bronx. Knowing what it’s like to barely survive while living paycheck to paycheck, it’s sometimes hard to think I am worthy of making X amount of money. But yet, I want to achieve financial freedom because I never want to be poor again,” she says, pointing out the impossible bind women of color find themselves in around money.

While Zuniga-Sanchez admits that she’s unsure if she has overcome the scarcity mindset yet, the money coach shares the advice she tells herself and her clients: “You have to look at money objectively. Try to remove emotions from money. This isn’t always easy, which is why we have financial therapists, but when we set aside our emotions, we can be smart.” With the right resources and mindset, Zuniga-Sanchez hopes we can ultimately all get closer to our financial goals together. As she tells us, "My biggest accomplishment would be looking around me decades from now and seeing my best friend, sisters, and clients rise with me because we took the actions to get there.”