New Pew study finds financial security remains elusive for Americans
Pew's survey of 7,000 households found more than half reported they spent more than they made each month or, at best, broke even. A third have no savings set aside. And close to two-thirds said they doubt their ability to weather an unexpected expense.
In light of the precarious spot many Americans find themselves in, it's welcome news that next week, a coalition of Cuyahoga County nonprofits plan to announce a new one-on-one financial coaching program that will give people advice on budgeting, saving, paying down debts and building credit.
The idea behind the Community Financial Centers' program is to make sure people in the Greater Cleveland area, regardless of their income, can get sound, personalized advice on building and protecting precious financial assets.
As the Pew study makes clear, in the wake of a recession that evaporated household wealth, especially for low- and mid-income families, it's been hard for people to claw their way back to financial security. And by financial security, they don't mean largess.
In focus groups conducted ahead of the Pew study, people defined financial security as simply knowing they could pay their bills and have a bit left over for savings and a few extras. That modest definition makes it even more sobering that families found it so elusive.
Eight in 10 people reported that in the last year their household had suffered a economic shock due to a drop in income, hospitalization, death of a partner, or a major household or car repair. And more than half said their income or expenses fluctuated from month to month, making it hard to budget.
The Pew report comes on the heels of the Corporation for Enterprise Development's annual scorecard, which ranked Ohio 35th for financial security. The state got low marks because close to one-third of its residents are in low-income jobs, 20 percent don't have or use bank accounts, and its college graduates struggle with high student loan debts, on average about $29,000.
It's clear that policymakers need to find better ways to help families across the income spectrum recover from the scars left by the recession and rebuild assets.
Tellingly, when Pew asked people whether they'd choose financial security or upward mobility, nine in 10 said they'd settle for being able to pay the bills.