One Half of Texans Lack "Rainy Day" Savings
WASHINGTON, D.C. – One in every two Texans lacks a solid “rainy day” savings cushion if they were to suddenly be faced with a loss-of-income emergency.
A report released Tuesday by the national nonprofit Corporation for Enterprise Development (CFED) said 27.7 percent of households are “asset poor,” and in removing assets like a vehicle or home, the asset poverty rate jumps to 50.6 percent.
An “asset poor” family has little or no financial cushion, and Texas ranked as 41st in the country overall on the 2012 Assets and Opportunity Scorecard reviewing how residents score in terms of financial security. Although many Texans have jobs, few can say they have a savings account that would be able to hold them over for three months if they were to lose a steady income.
Researchers say that scraping by day to day is a constant struggle and investing in the future is all but impossible for asset poor families.
“Growing numbers of Americans have almost no savings or other assets to fall back on if they lose their jobs or face a medical crisis,” said Andrea Levere, president of CFED. “Without those savings, few will be able to invest in a more economically secure future, including buying a home, saving for their children’s college educations or building a retirement nest egg.”
The Scorecard looks into how residents of all states fare in five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education.
How well did Texas do as far as Financial Assets and Income? Almost failing. With a score of a “D,” the Scorecard indicated Texans lack the opportunity to earn, save and build assets. In the area of healthcare, Texas reportedly had the worst uninsured rate in the country.
The Scorecard did highlight a dozen policy solutions to help improve Texas’ standing that would increase opportunity, promote financial well-being and increase college access and success.
“To expand economic opportunity throughout the state, Texas needs to support and enhance effective asset-building policies that advance financial education, improve credit and credit scores, and promote savings,” said Woody Widrow, Executive Director of RAISE Texas, a Lead State Organization for the national Assets & Opportunity Network. “To the lay the necessary groundwork for future prosperity, Texas must improve college savings enrollment while increasing access to non-predatory short-term consumer loans.”
To read a full analysis of key findings from the Assets & Opportunity Scorecard visit http://assetsandopportunity.org/assets/2012_scorecard.pdf. To access the complete Scorecard visit http://scorecard.cfed.org.