This week, I am representing Goodwill® at the Assets Learning Conference, a biennial convening of practitioners, researchers, and advocates (that’s me) dedicated to improving the financial well-being of individuals and families. The event is produced by CFED, who many of you may know as an organization that works at the local, state and national levels to expand economic opportunity and reduce poverty. Even if you didn’t know CFED before today, their mission is certainly a familiar one – Goodwill, and you, work every day to expand opportunity and reduce poverty, which is why we’re here.
So, where are we, and where do we go from here? In a snapshot of the state of household financial security, here’s where we are:
The Bad News
- Fifty-five percent of Americans (70 percent of those ages 18-24) experience more than a 30 percent month-to-month change in total income, making stability a serious challenge for most people.
- Almost half of American households are “liquid asset poor.“ They do not have three months of savings to handle expenses should there be a job loss or significant impact on income.
- Racial and economic inequality are intertwined as the racial wealth divide is growing: over the past three decades, the average wealth of Caucasian families has grown by 84 percent – 1.2 times the growth rate for Latino families and three times the growth rate for African American families.
The Good News
- The Earned Income Tax Credit (EITC) has done more to alleviate poverty than any other program with the same goal.
- Volunteer Income Tax Assistance Program (VITA), the federally funded program that provides free tax preparation to lower-income Americans, provided services at 12,000 sites with 90,000 volunteers, preparing 3.7 million returns in 2015.
- Communities, organizations and corporations are joining together to take action on the racial wealth divide, investing in communities to address key factors like unemployment, home ownership, income inequality, entrepreneurship, savings and educational attainment.
Some of these issues may sound familiar, and others you may be hearing for the first time. The$20,000 question is: what can we do about it? There are hundreds of ideas floating around the conference, but two key takeaways are:
- Check out some random control trial studies on financial coaching and use an evidence-based program at your Goodwill to ensure that your financial wellness efforts pay off.
- Sign up for our advocacy alerts to join efforts in the coming months to expand EITC and continue VITA – programs that help propel lower-income individuals and bridge the racial wealth divide.
The hope, based on research and practice, is that these efforts along with some additional key policy changes will decrease financial volatility and increase the likelihood of financial security for the adults and children you serve.
