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Enhance Financial Education Services and 4 more... less...

Increase Access to Health Insurance

Increase Access to Health Insurance

Increase Access to Health Insurance

Enhance Financial Education Services

# of financial partnerships formed

Current Value

7

Q4 2023

Definition

Line Bar Comparison

Story Behind the Curve

Why Is This Important?

Building financial management skills - such as budgeting, reducing debt, improving credit scores, starting savings plans, and investing - is an important step in becoming economically resilient. 

Net worth is a measurement based on a person's total assets minus their liabilities.  Households experiencing net worth poverty do not have enough assets to cover their basic needs for three months.  Net worth poverty limits families' abilities to become economically resilient and to invest in their future (and their children's future).  A groundbreaking study from Duke University found that that over one third of American families were net worth poor in 2019.  The national statistics for people of color were even more grim.  In 2019, 57% of black families and 50% of Latino families with children were net worth poor.

While the exact percentage of people with debt in CMCA's service area is unknown, the percentage of people with debt in collections varied from 23.9% to 35.9%, depending on the county.  The average amount of debt in collections was $2,525.  Debt impacts the amount of funds available for other spending or saving and influences credit scores.  

Establishing and maintaining a savings account is an important step in building financial resiliency.  People without savings often struggle to recover from financial shocks, or unexpected expenses that arise outside of routine bills or living expenses.  In these situations, those without savings often turn to high cost financial services, such as credit cards or payday loans, which often lead to debt and increase the difficulty of establishing a savings fund for emergency expenses.

Credit scores help determine whether or not someone can get credit, the terms on which credit is offered, and how much it will cost to borrow.  Credit scores influence nearly all aspects of life including housing, transportation, insurance, and employment.  Credit also plays a role in setting up utilities, getting a cell phone, and negotiating interest rates or refinancing.  

By developing these financial management skills in conjunction with increasing their net worth, families can significantly improve their economic resiliency and break the cycle of poverty.

Sources:

1. Gibson-Davis C, Keister LA, Gennetian LA. Net worth poverty in child households by race and ethnicity, 1989-2019J Marriage Fam. 2020.

2. Urban Institute. (February 2021). Credit Health during the COVID 19 Pandemic

3. Consumer Financial Protection Bureau. (n.d.). Why savings matters: The latest research. Consumer Financial Protection Bureau. 

4. Taylor, K. (2020, January 29). Credit score ranges and what they mean: How will the New Fico changes impact them? How to Pay For College: The Complete Guide from Nitro. 

How We Impact

CMCA partners with local financial institutions to expand the types of financial opportunities available to low-income individuals.  For example, community education on budgeting, loan information, or general banking services might be offered or expanded.  Our action plan includes creating an incentive plan designed to encourage class participation, as well as the development of a training bank of resources targeting specific financial topics.  

CMCA is also working to build partnerships with local employers, medical professionals, and health-focused programs to ensure that low-income people have access to health care through our Healthcare Advocate Program.

Interested in helping CMCA make an impact in your community?  Click here to learn more.

Clear Impact Suite is an easy-to-use, web-based software platform that helps your staff collaborate with external stakeholders and community partners by utilizing the combination of data collection, performance reporting, and program planning.

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