Every other Friday, Raul Valenzuela gets paid in cash for the hours he spends shining shoes in a Chandler barbershop. He deposits the money in his Wells Fargo savings account. That's the extent of his interaction with a bank.
Even then, Valenzuela is not typical of most Mexican immigrants because he actually has a bank account. According to the Federal Deposit Insurance Corp., 75 percent of Mexican immigrants - legal and illegal - don't.
The reasons that Mexican immigrants remain largely unbanked vary: a lack of legal identification, a history of mistrusting banks in their home country and the perceived complexities of banking in another language.
"These people are coming from countries where they don't trust the government or banks, places where there is no such entity as the FDIC," said Allen Gutierrez of The Latino Coalition, an advocacy organization that addresses, among other areas, the economic needs of Latinos. "They still have that mentality they could lose everything."
Valenzuela knows the feeling. By his estimate, he lost 5,000 pesos he deposited in Banco Mexico. "It was my savings, all of my hard work, gone," he stated. Left with no recourse, Valenzuela accepted the loss and moved on.
The problems associated with the high rates of financial illiteracy among Latinos, the fastest-growing segment of the U.S. population, are much deeper than individual ones like those faced by Valenzuela.
The median net worth of Latinos under age 35 is $8,000 compared with $19,000 for non-Hispanic whites. At retirement age, the disparity is even greater: $251,000 in median net worth for non-Hispanic whites versus $31,000 for Latinos, according to a report by the Filene Research Institute.
And the National Council of La Raza reported that over half of Hispanic households have no accumulated assets in a 401(k) or IRA. Only one of two - including American-born Latinos - has a checking or savings account, and 43 percent of those surveyed knew nothing about investing or saving for retirement.
Coupled with projections that the number of Latinos aged 65 and older will grow from 1.7 million in 2000 to 15.2 million in 2050, it's clear that financial problems are both short-term and long-term problems in the Latino community.
Those kinds of stark figures have prompted financial institutions, advocacy groups and social service organizations to try to attack the issue of financial literacy.
One new program seeks to reach out to the 30,000 unbanked households, of which 54 percent are Latino, in Austin, Texas. Bank on Central Texas, a program started by the United Way and People Fund, is on a mission to help people open 6,000 new accounts during the first year of the campaign.
Its message is underscored by another sobering statistic provided by the Brookings Institution. According to the Bank on Central Texas website, an unbanked person working full-time wastes approximately $40,000 in his lifetime on check-cashing services. Broken down annually, the website states the average unbanked, working household in Austin spends anywhere from $213 to $918 a year just to cash paychecks.
"The goal is to find solutions to these issues," said Jill Shaw, director of financial service for the United Way in Austin.
That's precisely what Bank on Central Texas aims to achieve through a strong public-awareness campaign, clearly defined benchmark goals and, as Shaw puts it, "helping people find the best fit."
That may prove challenging. Shaw said that, "ID is the biggest reason people avoid banks. They simply don't have it."
Businesses reflect the market, and in Austin the unbanked market is reflected this way: There are 70 check-cashing businesses, 52 payday lenders, 222 banks and 51 pawnshops.
But it's not necessarily an issue of location and convenience. "We have found banks in low-census-tract ZIP codes, so that's not entirely the issue," Shaw said.
It's often more simple than that. After working long hours for low wages, many Latino immigrants feel they have nothing left to bank and that a relationship with a bank just doesn't fit into their lives.
Jesus, an illegal immigrant from Sinaloa, has been in Arizona for five years. He hasn't stepped foot in a bank and doesn't see himself ever doing so. "My money doesn't build up," he said. "I will never have enough to worry about that."
For Oscar, an illegal immigrant who lived in Arizona for 20 years before being deported, keeping what little money he had with him was like a safety net.
"I wanted to keep all the money I made in my own pockets," he said, "so I could buy what I wanted when I wanted."
Oscar says he paid taxes out of his paycheck while working in the United States. The irony is that, as an illegal immigrant, he would never have access to Social Security and other future benefits for which he had no choice but to pay into each month. He says making ends meet was at the forefront of his mind; saving for the future was never really something he was in a position to consider.
While the consequences of not saving may not be as impactful today, they pose a threat to one's livelihood in his or her golden years.
According to a Filene Research Institute report by Barbara Robles, a former Arizona State University professor who is now a senior researcher for the Federal Reserve System, the gaps on a series of median financial indicators continues to widen as the population ages.
The sharp divide between the net worth of Latinos and the rest of the population creates a group that is poorly equipped to deal with emergencies or retirement. Robles' report says that for every dollar of non-Hispanic white net worth, Latinos hold only 40 cents.
Groups like Gutierrez's Latino Coalition point to the rapidly growing Latino population as example of why it's imperative to address financial literacy. According to U.S. Census Bureau projections, the Latino population in the U.S. will grow from an estimated 47.8 million - 15.5 percent of the total population - in 2010 to 102.6 million, representing nearly a quarter of the nation's population, in 2050.
The Latino demographic "tends not to be active in planning for the future," Gutierrez said. The Latino Coalition recognizes an emerging problem, which is why Gutierrez says it is working with Americans for Secure Retirement to advocate and develop outreach programs. The coalition wants to start by encouraging more Latinos to participate in 401(k) plans.
According to the Latino Coalition, 10 years ago only 35 percent of Hispanics had more than $5,000 saved for retirement.
Beyond dealing with an aging unbanked population, banks and other businesses see a vastly undeveloped market and the opportunities growth and profit.
Milton Dellossier, regional diverse segments manager for Wells Fargo Home Mortgage, says Wells Fargo knows the importance of the market and has taken significant steps in reaching out to unbanked Latinos.
"There are all walks of life in this country," he said. "It's our social responsibility to serve everyone."
One way Wells Fargo is reaching out to Latinos is through a financial literacy program called El Futuro En Tus Manos - translating simply as "the future in your hands." The program is available online or in person. In 2009, the English and Spanish websites garnered a combined total of 182,225 unique visitors. Dellossier calls the program "a community service."
According to Marge Rice, spokeswoman for Wells Fargo Regional Banking, the site was launched to reach the rapidly growing Latino population and meet its needs for financial planning and asset building.
But what makes the program serve the needs of all is how it targets different age groups to help them meet their financial needs. Investing in the financial education of school-age children not only pays dividends in the future but also provides a dynamic opportunity, allowing children to help bring their non-English speaking parents into the financial mainstream.
Valenzuela says he was able to open a bank account because he has a matricula consular, which is an identification card issued by the Mexican consulate to its citizens residing in the United States. It's a common form of identification, and in the past few years has become widely accepted by banks.
It's not a surprise that Valenzuela banks at Wells Fargo. It was, after all, one of the first banks in the country to accept the matricula consular as a form of identification for opening a bank account.
Laura Castro de Cortes founded Latino Banking Solutions, a company that consults with large banks about how to effectively capture the Latino market.
"It's rare to find a bank these days that doesn't take the matricula consular," she said. Still, Latino immigrants aren't fully utilizing the services banks offer, and it's putting them at a disadvantage. Castro says it takes more than translating brochures into Spanish. What it comes down to, she says, is "people, product and placement."
Castro says that means hiring a sufficient number of bilingual employees, translating brochures and paperwork and placing ATMs in convenient areas, such as in or near places that employ a predominantly Latino workforce. The theory is that access and ease will help bring this unbanked population into the financial mainstream.
But like so many other Mexican immigrants, Valenzuela, the shoeshine worker, pays his bills through money orders. That includes the $200 he sends home every few months to his family in Mexico, just as 36 percent of Hispanic immigrants do each month, according research by the Pew Hispanic Center.
Valenzuela says each money order costs him $2 at the market he patronizes off of Power Road in Mesa. He knows he could be writing checks from his Wells Fargo savings account for free, but he doesn't know how. When asked what's stopping him from learning, Valenzuela shrugs. He hasn't asked for help.
First, there's the language barrier. Valenzuela's English is limited. He tried going to school before to learn English, but said he just got frustrated and dropped out.
Despite banking at Wells Fargo, he says he has never heard of El Futuro En Tus Manos. He seems unsure as to whether he would take advantage of the program. The thought of diving into the complexities of banking seems too daunting to him.
He knows he could be saving money by writing checks and says he would like to one day learn.
But for now, check writing and the American banking system are just as foreign to him as the English language.
When asked why Latinos don't build wealth at a rate similar to other ethnic groups, Gutierrez characterized a general mentality as, "You only live once. Why leave anything behind? Use the money now."
That mentality is present in a group of day laborers who congregated just off of Home Depot's property in central Phoenix. The lucky ones will be picked up for the day to make a small amount of cash - oftentimes below the minimum wage. They're frequently paid less than promised.
They say they know they're being exploited, but they're powerless. Keep the work coming or they're stuck on the street. They know no day but today.
Unlike Valenzuela the shoe shiner, these men are here illegally.
Franco has been living in Arizona illegally for three years. He doesn't want to share his last name. After all, even a young periodista, a journalist, delving into the world of immigrants and money may not be who she seems.
He's guarded but gives some insight into his day.
He left his hometown of Puebla, Mexico, like many others, in search of better opportunities. For immigrants in Arizona, that usually means manual labor.
So far, it's been a tough road. "Trabajo muy poco," he says.
I work very little.
When asked if he has a bank account, he says, "I don't even have enough to buy a soda right now."
He pays the rent on his one bedroom apartment in cash. He doesn't have a car or send money home. He can't afford either. His one luxury - arguably a necessity - is a prepaid cell phone he tops off with credits when his cash flow permits.
Whether this mentality will catch up to him in the future isn't something that weighs on him. He's just trying to take each day as it comes.
Gutierrez, of The Latino Coalition, points out, "It's an ongoing challenge to assimilate to new resources in a new country."
And it's a cycle that is continually perpetuated. According to a presentation by Barbara Robles, family financial behaviors are strikingly similar in low-income communities of U.S.-born Latinos and Latino immigrants.
But there is hope to be found in the research of the Frontera Asset Building Network, a coalition which aims to help families in the Southwest border region increase their income and asset holdings.
Thirty-thousand surveys were distributed over the course of five years and filled out by families who used low-income tax preparation sites in border counties. When asked which financial services they would like to know more about, 26 percent said home ownership, followed by 14.7 percent choosing auto loans - both key starting points for building assets and a secure future.
But perhaps the third-place choice is the most intriguing and reflective of the changing financial landscape: Nearly 12 percent wanted to know more about creating a children's savings account.