Many Latinx workers say they've 'wiped out' emergency savings during pandemic

As Hispanic unemployment numbers soar, the damaging personal finance effects of the Covid-19 recession are becoming increasingly clear. Latinx workers have dipped into emergency savings at a higher rate than the broader population, according to the new CNBC + Acorns Invest in You survey. 

Twenty-one percent of Hispanics responded that they'd "wiped out" their emergency savings this year versus 13% of White Americans. Even more worryingly, 12% of Hispanics reported feeling "not too confident" that they'd have a job at the end of this year, contrasted with only 6% of White respondents who felt similarly. Nationally, the survey found that 14% of Americans say they've exhausted all savings.

 More than 5,400 adults were surveyed online in August by SurveyMonkey.

The discrepancies revealed by the survey underscore the disproportionate impact of the Covid-19 recession on people of color, particularly workers in the most vulnerable industries, such as restaurants, hospitality, and transportation. That's why Hispanics, like all workers who feel their finances threatened by Covid-19, should take extra steps to shore up their finances now, in order to avoid depleting savings, accumulating debt, and falling behind financially. Many Americans, including Hispanics, are becoming better savers as a result of the pandemic.

The good news is that the Latinx population is taking steps to remedy the situation. By a 10% margin, Hispanics are likelier to say they are "more of a saver now" than before Covid-19 (54% of Hispanics respondents versus 44% of White respondents).

"Worry about the current economic situation" has caused 62% of Hispanics to say they've decreased their monthly spending.

This focus on budgeting and moderating spending habits is important if you're still employed, but becomes critical in the event of a job loss, reduction in hours, or furlough. As the nation faces the uncertainty of the upcoming fall and winter seasons (when Covid-19 may spike again and more businesses may suffer), it's important to use this newfound financial focus to create a readiness plan and protect savings.

For Hispanics, who represent 17% of the U.S. population, but hold only 2% of the wealth, the impetus to protect and rebuild is even stronger.

If you're currently employed, now is the time to assess your habits and buttress your emergency savings. This also applies if you depleted your emergency savings recently and now are once again employed.

The goal should be to build three-to-six months of essential expenses in savings. During challenging economic times, some experts recommend a minimum of six months' expenses in savings. This can be a tall order, but there are ways to achieve this goal.

First, assess your budget for unnecessary, ongoing expenses, such as food delivery or streaming services that go under-utilized or gym memberships you don't touch. Put all of that money into emergency savings, instead. You should also cut unnecessary discretionary expenses, such as eating out frequently, or online shopping.

Next, assess your paycheck. Are you anticipating a tax refund next year? Reduce your withholding to increase your monthly take-home pay instead. Put the extra cash into your emergency account.

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Ditto for 401(k) contributions. If you have less than three months of emergency savings, don't contribute more into your 401(k) than what's required for a full employer match. Put that money into an easily accessible emergency account instead.

Next, assess any debt — including mortgages, credit cards, and auto loans. Call each creditor to request lower interest rates or payment forbearance, if possible. If these are granted, take the extra cash and apply it toward savings.

One of the most critical lessons to learn about emergency savings is that its sole purpose is to protect you from unexpected hardship. It protects you in ways unemployment compensation or other safety nets often can't. It should also be immediately accessible, so that you have cash on hand when you're truly dealing with an emergency, and don't have time to tap investments or other assets. If you're rebuilding an emergency savings account, it should be your utmost priority — even over paying down high-interest debt rapidly.

Unemployed workers might be tempted to tap emergency savings too soon. Generally speaking, you should use any severance pay or unemployment compensation prior to touching your emergency savings — you might need those savings for longer than you anticipate.

Even if you're unemployed, it might be possible to protect, or even build, your savings. If you've received a stimulus check, save any part of it you can. And if some of your expenses can be addressed through social safety net programs, use them to the extent possible. (LULAC has an excellent Covid resource guide for the Latinx community highlighting food banks, free health resources, rent and housing grant protection programs, and more.) Most cities and states have various resources and programs available to help bridge financial gaps, and any savings you achieve can help buttress your emergency fund.

Rebuilding after financial setbacks asks us to be dedicated, resourceful, and resilient, all characteristics on which the Hispanic community prides itself. Now is the time to employ those skills in force, by seeking additional sources of income, budgeting creatively, asking all family members to pitch in, and planning for tomorrow.

What does tomorrow look like? Does it require new job skills or training? Does it mean starting a small business, or working for yourself? Does it mean learning how to invest, or finally getting out of debt?

Asking yourself how to build a more resilient financial future can prepare you mentally for that type of planning. Use this time wisely to create a financial resilience map for yourself, and begin your journey by taking concrete actions toward a stronger future.

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CHECK OUT: How I went from owing $29,000 and making under $36,000 to debt-free with over $100,000 saved via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.