Lindsay Diaz and her son stand in what's left of their home after tornadoes tore through North Texas on Dec. 26, 2015.KERA's One Crisis Away project focuses on North Texans living on the financial edge.The problem's known as asset poverty, and it doesn’t discriminate. A job loss, health emergency, even legal trouble can be enough to plunge a third of our friends and neighbors into financial distress. One Crisis Away puts a human face on asset poverty and the financial struggles of people in North TexasExplore the series so far and join the KERA News team as they add new chapters to One Crisis Away in the months to come.One Crisis Away is funded in part by the Communities Foundation of Texas, Allstate Foundation, the Texas Women's Foundation, The Fort Worth Foundation, The Thomson Family Foundation, and the United Way of Metropolitan Dallas.
Research Shows If Families Struggle With Money, It Ends Up Costing The City
When a family struggles with money, it can actually affect a city's finances.
How financially insecure families can cost cities money
- Eviction: If a family has little or no savings, that family is much more likely to be evicted if finances are disrupted, for example, if someone loses a job. If they are evicted, they're at much higher risk of becoming homeless. And homeless men, women and children cost cities thousands of dollars each year. People living in financially insecure households are 14 times more likely to be evicted after a disruption to their finances.
- Missed utility bills: In the U.S., $12 billion in public utilities sales taxes were collected last year. That money goes toward things like infrastructure and transportation. If something goes awry for a financially insecure family, that family is three times more likely to miss a utility bill payment compared with a family that's on solid financial footing.
- Missed house payments: Missed house payments mean missed property taxes; and cities really rely on them. The typical local government generates almost of third of its revenue from collecting property taxes, so when people miss house payments, it puts a dent in a city's revenues and spending power.
What financial insecurity looks like
- In Dallas, 332,000 families, or 65%, are financially insecure.
- Financial insecure families don’t have $2,000 in savings
- Credit scores are also indicators of whether households are on solid ground. In Dallas, 43% of residents have subprime credit, meaning a score under 600.
How communities can help residents have healthier finances
- Offer financial coaching for residents
- Assess employment practices; for example, maybe consider getting rid of the credit check during the hiring process.
- Make small-dollar emergency loans available to employees, so more people have access to affordable credit and don't have to use credit cards or payday lenders. The hope there is that someone can successfully repay their loan and build good credit.
- Savings programs with incentives, like matching funds.