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United Way of Southeast Louisiana

United Way of Southeast Louisiana. Financial Stability—Eliminating Poverty Presented by: Odessa Adams-Payne. Educational Session. Financial Asset Building “With income we get by, but with financial assets we get ahead.” Ray Boshara --Vice President of New America Foundation

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United Way of Southeast Louisiana

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  1. United Way of Southeast Louisiana Financial Stability—Eliminating Poverty Presented by: Odessa Adams-Payne Educational Session

  2. Financial Asset Building “With income we get by, but with financial assets we get ahead.” Ray Boshara --Vice President of New America Foundation “Few people have ever spent their way out of poverty. Those who escape do so through saving and investing for the long-term.” Michael Sherraden --Center for Social Development, Washington University

  3. Definitions • Income Poverty Rate—percentage of households with income below the poverty threshold. ($11,490) • Asset Poverty Rate—percentage of households without sufficient net worth to live at the poverty level for 3 in the absence of income. • Liquid Asset Poverty Rate—percentage of households without liquid assets (bank accounts, other financial assets) to live at the poverty rate for 3 months in the absence of income. • Level of assets needed to live at the poverty level for 3 months varies by family size. For example, a family of four would need at least $4,632.

  4. Louisiana Profile • Income Poverty Rate 19.7% • Asset Poverty Rate 26.1% • Liquid Asset Poverty 47.4% • Louisiana Ranks 50th in Income Poverty Rate United Way of Southeast Louisiana

  5. Asset PovertyLouisiana Profile

  6. Comparison of Louisiana & United States 47.4% United Way of SELA

  7. Net Worth Comparison United Way of SELA

  8. United States 5.1% MORE THAN $90,000 83% EARN LESS THAN 11.5% $55,465 - $90,000 18.9% $34,837 -$55,464 $55K a year $18,181 - $34,836 28% LESS THAN $18,181 36.5% United Way of SELA

  9. Households with Savings United Way of SELA

  10. Unbanked and Underbanked United Way of SELA

  11. Low Wage Jobs 32.2% United Way of SELA

  12. Average Annual Salaries $45,516 United Way of SELA

  13. Retirement Plan Participation United Way of SELA

  14. Asset PovertyConsumers with Subprime Credit United Way of SELA

  15. Households with Savings United Way of SELA

  16. Education United Way of SELA

  17. Health Care Uninsured Rate 19.9% United Way of SELA

  18. Social and Economic Indicators for UWSELA, LA and USA United Way of SELA

  19. Footprint of UWSELA Service Area and LA United Way of SELA

  20. Building Assets Six Core Asset Building Strategies IDAs ACF’s Assets for Independence (AFI) provides grants for matched savings accounts, which can be used to acquire lifelong assets PUBLIC BENEFITS Low-income families for eligible for federal and state benefit programs that can extend the reach of their income TAX CREDITS & FAX PREPARATION Low-income families can access thousands of dollars in tax credits FINANCIAL EDUCATION Free financial education curricula can help families make informed money management decisions. GETTING BANKED Bank accounts enable families to reduce reliance on check-cashers and other high-cost ‘fringe’ financial services. BORROWING / DEBT MANAGEMENT Families often need assistance to establish a positive credit history, repair their credit, and get out of debt.

  21. Household Financial Security Framework LEARN build financial skills and human capital Assets can increase earning capacity INVEST in assets that will generate wealth & income EARN income public benefits SAVE for emergencies & the future PROTECT gains made through insurance & avoiding predatory lending *CFED—Why Assets Matter—2011

  22. Implications for Policy • Reinstate funding for the Individual Development Account Program. Allow at least 20% of the funding to be used to administer the program. • Increase Louisiana’s Earned Income Tax Credit. Currently it is only 3.5% of the federal credit. • Louisiana does not provide state support for IDAs. The state should provide at least $500 in funding per low income resident, designate a strong steward to administer the program, allow 20% of funding to be used for administrative costs; and ensure that funding is stable over time. United Way of SELA

  23. Policy Implications Cont. • Provide protection from Predatory Short-Term Loans—protect consumers from predatory payday lending, the rate cap is 574% APR; protect consumers against predatory short-term installment loans, the cap is 81% APR; include protection for predatory lending in basic consumer protection laws. • Make Financial Education should mandatory early childhood education, elementary, middle, and high school. Currently it’s optional. United Way of SELA

  24. Contact Information: • Odessa Adams-Payne • OdessaA@UnitedWaySELA.org • (504) 827-6822 United Way of SELA

  25. Thank You!

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