|Financial ruin may threaten over half of N.C. households|
|Published Thursday, February 13, 2014|
According to a recent press release issued by the N.C. Assets Alliance, North Carolina ranks 46th nationally in overall financial security of its residents. Over half of the state’s households (51.5 percent) are in a continual state of financial insecurity, according to the Corporation for Enterprise Development.
Households that have little to no savings have increased in number, continuing a four-year upward trend in lack of family financial security. These households are labeled "liquid asset poor" by the CFED, which means they lack necessary savings to cover basic expenses at the federal poverty level for three months if there was an extenuating circumstance such as job loss or medical crisis.
The majority of these households are those who live below the income poverty line of $23,550 for a family of four and even some middle class families. Over a third of households earning between roughly $50,000 and $80,000 annually have less than three months of savings.
The 2014 CFED Assets & Opportunity Scorecard outlines rankings for all 50 states on the ability of residents to achieve financial security and state policies to help them get there. It evaluates how residents are faring across 66 outcome measures in five different issue areas: financial assets and income, businesses and jobs, housing and home ownership, health care and education.
With North Carolina's score of 46, it is near the bottom. The state received an "F" in businesses and jobs due to its poor small business ownership rate and disparities in business ownership by race. White residents are more than twice as likely to own a business than minorities.
North Carolina also has an unemployment rate of 8.6 percent, which is higher than the national average. It has the 37th highest percentage of uninsured residents, including high rates of uninsured low-income families. The report also stated that residents aren't building wealth or achieving economic security. Over 30 percent of households are not connected to the financial mainstream and over 9 percent of adults don't own a bank account.
Though North Carolina has succeeded in policy requirements such as protections from predatory lending, the lack of unemployment extensions, failure to expand Medicaid and a rise in sales tax have all increased monetary challenges for struggling families.
"Nationally, policies at all levels of government helped stem the tide of the recession’s damage to household finances," CFED President Andrea Levere said. "They protected consumers from foreclosure and abusive financial practices, helped raise wages and connected families to the financial mainstream."
There are 67 policy measures, as evaluated by the Scorecard, to determine how well states are addressing resident challenges. North Carolina has implemented only 31 of the practices aimed at decreasing poverty and creating more opportunity.
"Policymakers could still do a great deal more to help families achieve long-term economic success," said Donna Gallagher of the N.C. Assets Alliance. "North Carolina residents continue to struggle with persistent financial insecurity and have limited opportunities to improve their circumstances."
Gallagher expressed the need to extend unemployment benefits and expand Medicaid as mentioned, but also make college more affordable and reinstate poverty alleviation tax credits.
|I think also there is a great need for extensive Financial management education starting at the earliest possible level in our school systems. For adults, we should also have free courses on how to save in an economic downturn.. net net we need to get back to the basics of teaching HOW to save..|
|Posted on February 13, 2014|
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