Friday, February 3, 2012


Last month, the Corporation for Enterprise Development (CFED) released its 2012 Assets and Opportunity Scorecard, which measures the fiscal health and security of our nation’s residents.  In addition to highlighting key state and national findings, the Scorecardpresents information about an array of policies and programs that states can implement to help families build assets and work towards financial security.

In the midst of economic uncertainty, it is not surprising that many families and communities are struggling to make ends meet, which has resulted in an official poverty rate of 15.1% - the highest rate our nation has seen in recent decades.  However, the Scorecard suggests that the official poverty rate – the percentage of people with insufficient income to cover their daily expenses – does not account for the millions of families that lack the assets and savings needed to meet their longer term needs.  According to the Scorecard, roughly 27% of households are living in “asset poverty,” which is defined as “not having the savings or other assets (e.g., a house, car or business) needed to cover basic expenses for three months if a layoff or other emergency leads to loss of income.”  The Scorecardfurther explores the financial health of families by measuring “liquid asset poverty,” which is defined as “not having sufficient liquid assets (e.g., bank accounts and other financial assets) to live at the poverty level for three months in the absence of income.”  According to this measure, roughly 43% of households are “liquid asset poor” and have little savings or cash available to use in case of emergencies.

These statistics highlight the bleak situation that many families find themselves facing, particularly families of color.  Roughly 44% of households of color are “asset poor” and 65% are “liquid asset poor.” With little assets or savings, families cannot save for future expenses or build financial security.

The Scorecard illustrates what is needed for families to build financial security over time and suggests different programs and policies that can support this effort.  Their suggestions include increasing access to financial education in schools and communities and providing families with access to quality financial services.

For more information about the Scorecard, please click here.

To learn more about asset-building tools and programs in your community, please click here.

0 comments:

Post a Comment