A Latina Money Expert's Tips For Paying Off All Your Debt

A lack of financial literacy poses a significant barrier for Latines in the United States, often hindering their ability to build equitable wealth. So we asked five Latina money coaches to offer their financial expertise on all the pressing topics you have questions about, from building credit to homeownership. This Women's History Month, we want Latinas to understand that regardless of their financial journey so far, they do have the power to improve their financial well-being for generations to come.

Jannese Torres is proud to say "Yo Quiero Dinero!" It's the name of her hit podcast, in which she talks about how she was able to pay off all her debt, save to invest, and is now living the life of her dreams: traveling frequently, working from anywhere in the world, and being her own boss.

"I don't place limitations on what I believe I can accomplish," Torres tells POPSUGAR.

According to researchers at the Institute of Latino Studies at the University of Notre Dame, Latinas are often the heads of their households when it comes to managing finances, but a lack of financial literacy has held them back despite having a huge appetite for financial education and a strong desire to save. Latinas' low earnings — 57 cents for every dollar earned by a white man — means they don't save as much as they'd like to. They'd also benefit greatly from financial education, especially when transitioning between jobs and figuring out what to do with retirement accounts.

"Our community's lack of understanding is rooted in fear, trauma, and distrust of financial systems," Torres says. "That fear makes us avoid things like investing and entrepreneurship because it's seen as too risky."

One of the biggest financial setbacks the Latine community faces is higher education. According to a 2023 survey released by the Pew Research Center, Black (50 percent) and Hispanic (40 percent) student loan borrowers are more likely to have their loans default than white borrowers (29 percent).

"Latino student loan borrowers tend to earn less than non-Hispanic whites and fall behind on their student loans at a higher rate according to consumer advocates," Torres explains.

Another factor causing debt for Latines is homeownership. In 2022, the Hispanic homeownership rate increased to 48.6 percent, marking eight years of consistent homeownership growth, according to the National Association of Hispanic Real Estate Professionals.

Research has proven how high of a priority homeownership is among Latines. According to Pew, 33 percent of Latines said homeownership is an extremely important life goal for them. Twenty-six percent attributed achieving the American Dream to homeownership and financial stability. On the flip side, 31 percent of Latines who didn't feel they've achieved the American Dream cited homeownership and financial stability.

"We normalize things like getting into debt for homeownership because it's seen as the only path to wealth," Torres says.

While Torres is not a huge proponent for supporting the idea that homeownership equals the American Dream, she does support the idea of living freely, and with that freedom comes financial independence, which she herself was determined to achieve.

"I thought the key to success was going to college, getting a good job with [a] pension or retirement plan, working there for 50 years, and buying a home," she recalls. "Then I discovered the financial independence movement through blogs and podcasts and began to learn that there were other options."

As she worked on cultivating an abundance mindset, she says it began impacting others around her as well. But the biggest thing that helped her was facing her debt head-on. She didn't deny it was there and didn't shy away from seeing the full picture. Once she could get a good look at things, she was able to create her plan for becoming debt-free.

"I started by determining my net worth using Personal Capital (now Empower)," she advises about utilizing the retirement planning company. "Seeing that I was over $400,000 in debt was the wake-up call I needed. I started my debt-free journey in 2018 and became debt-free in February 2020."

That is when she knew she wanted to share what she had learned with everyone willing to listen, specifically Latines. This eventually led her to launch her "Yo Quiero Dinero" podcast and become a money coach.

"As I began to share my debt-free and financial independence journey, I had friends and family continuously ask me what they should be doing with their money," she says. "So I started my podcast and coaching so I could share the info with them, and it grew from there."

Torres provided a shortcut through the journey of becoming debt-free by creating resources for others through the lessons she learned along the way. Her forthcoming book "Financially Lit!: The Modern Latina's Guide to Level Up Your Dinero & Become Financially Poderosa," which is available for pre-order before its April 30 release, is a culmination of those lessons and confirmation of her strong belief that "self-education is the foundation for changing your financial trajectory."

Torres's goal is to change the financial independence landscape for Latines in the United States, and she believes that paying down all your debt is the very first step. Here are her top five tips for becoming debt-free.

As mentioned previously, Torres began her journey by first facing her debt and calculating her net worth using one of the world's largest retirement planning companies, Empower, which is free. Knowing our net worth helps us to better understand our current financial situation.

Torres explains that your net worth is the value of everything you own (assets) minus the value of everything you owe (liabilities). This is the number that tells us a lot about our debt and whether or not it is manageable. If you have a positive net worth, it means that your assets outweigh or outperform your liabilities. If you have a negative net worth, the contrary is true: this would mean that your liabilities outweigh your assets.

"Cut out the fat from your budget," Torres advises. It's OK to indulge from time to time, but cutting the fat with even the lowest unnecessary expenses can have a huge return.

"Start by reviewing your monthly statements," Torres says. "Look for unnecessary subscriptions, gym memberships you're not using, meal delivery fees, streaming services you forgot about, and eliminate them."

This includes getting out of credit card debt. "If you have good credit, use the debt lasso method, where you use 0 percent interest offers on credit cards, transfer your credit card balances, and pay them off before the 0 percent interest period expires," Torres says. For those with not-so-good credit, Torres recommends working with a reputable debt/credit counseling organization like the National Foundation for Credit Counseling.

Torres recommends finding ways to bring in additional revenue and using that money to pay off your debt. She left her full-time engineering job when her side hustles of blogging and podcasting became her primary source of income. Along with her financial literacy podcast, Torres launched Delish Dlites, a food blog that she says now racks in six figures annually. Torres researched niche blogs she could be good at along with ways to optimize her posts with advertisements and affiliate marketing. Now, she's proud that her blog continues creating wealth even while she's traveling and enjoying her life.

"The best way to avoid debt is to save up an emergency fund," Torres explains, adding that creating an emergency fund based on goals or priorities you have, will allow you to live abundantly within your means.

"When you set aside money for life's unexpected events, it will help you manage those emergencies without taking on debt and compounding your stress," she says.

While it is important to create budgets, and emergency funds, and understand your net worth, Torres says money should never be something you avoid or feel guilty about because it gives into that lack mindset, which will only hold us back. "Managing our guilt when it comes to spending money is important to healing our relationship with money. Money should not be something we avoid."

Zayda Rivera is a former POPSUGAR Contributor. She has been a professional writer for more than 20 years. Z is a certified Reiki Master-Teacher, yoga and Zumba instructor, mindfulness and meditation guide, tarot reader, and spiritual mentor.