Nearly Half of American Households Lack Savings and Financial Security

The 2013 Assets and Opportunity Scorecard from the Corporation for Enterprise Development (CFED) reveals that 44% of households in the United States are “liquid asset poor.” Liquid asset poor families do not have enough fiscal savings to cover basic expenses for three months of crisis, such as sudden unemployment or a medical emergency. CFED also finds that one in three families do not have a savings account. The authors encourage investment in policies and programs that address financial insecurity through asset building and savings. The report gauges financial security in all 50 states and Washington, D.C. across five categories: financial assets and income, business and jobs, housing and homeownership, healthcare, and education. While many of those struggling financially live below the official income poverty line ($23,050), one quarter of middle class households earning $55,465 to $90,000 do not have enough savings to keep them above the poverty line for three months. Overall, the report does not cover how households are spending their income, but notes that 26% of households are considered “net worth asset poor” meaning their debts overwhelm what assets they do have. More than half (56%) of consumers do not qualify for credit at prime rates and the average borrower carries $10,736 in credit card debt. Net worth has declined by more than $27,000 since its peak in 2006, to $68,948 in 2010. Additionally, the homeownership rate has declined from 67.3% in 2006, to 64.6% in 2011. According to the report, the burdens of financial insecurity disproportionately affect households of color. The authors find that, although 58.3% of all liquid asset poor households are white, of the nation’s total households of color, two-thirds (62.6%) are labeled as liquid asset poor. Overall, white households have a higher homeownership rate (72%) than minority households (46.2%), and have 10 times the median net worth of households of color ($110,973 and $10,824, respectively). Across all five issue areas, states in the southeast and southwest fare the worst. The scorecard assesses states on the strength of 12 policies aimed at helping families build and protect their assets. Examples of these policies include: lifting asset limits for public benefit programs, offering tax credits to working families, increasing job quality standards and minimum wages, and preventing and protecting against foreclosure. States have adopted many of these policies to varying degrees. Though New York has the strongest policies to protect financially insecure households, the report concludes that even states with the strongest policies still have a long way to go to effectively assist liquid asset poor households.Living on the Edge: Financial Insecurity and Policies to Rebuild Prosperity in America. Findings from the 2013 Assets & Opportunity Scorecard by Jennifer Brooks and Kasey Wiedrich (CFED) can be found at