New numbers are out on the financial health of Texans, and they aren't pretty.
More than half the state's residents, including one-third of those earning $55,000 to $86,000 a year, don't have an emergency fund to cover three months of expenses. Almost 500,000 Texans are making at or below the minimum wage, the most of any state.Thirteen percent have no bank account, and 27 percent are "underbanked," meaning they have an account but rely on costly alternative services.Sixty-five percent have subprime credit scores, and 25 percent are uninsured.Those statistics add up to grades of D and F for Texas on the 2013 Assets & Opportunity Scorecard recently released by the Corporation for Enterprise Development, a policy and financial security research group in Washington, D.C."Although there are signs of improvement in Texas' economy, with unemployment edging downward in recent months, this year's Assets & Opportunity Scorecard paints a picture of a state -- and a nation -- that is struggling to achieve economic opportunity for all residents," said Jennifer Brooks, the group's director of state and local policy.Texas received a B in homeownership, largely because of affordability and a lower foreclosure rate, but the state ranked 39th overall in the ability to achieve financial security, based on 53 measures."Too many Texans are just getting by," said Woody Widrow, executive director of RAISE Texas, a statewide coalition focused on helping Texans build assets. "We haven't done enough with policy for people to move forward."Several efforts seek to change that, Widrow said. Starting in fall 2014, Texas children enrolled in public schools from kindergarten through eighth grade will receive financial literacy education as part of their math component, Widrow said.Today, high school students are taught financial literacy, but the teachers aren't always trained and the subject matter isn't tested, he said."Now it will be part of the math curriculum," he said. "And teachers are being trained through a partnership with RAISE Texas and the Texas Council on Economic Education."A pilot program in Amarillo is teaching fourth-graders financial literacy, with the incentive of a no-cost account at Happy State Bank and a $25 donation as seed money.The program, Smarter Texans Save, will test whether children with bank accounts learn more, Widrow said."We want to know if having a real-life bank account makes you more financially savvy," he said.In Fort Worth, Catholic Charities and the United Way have a similar program for adults, helping them set up a low- or no-cost savings account through the Education Employees Credit Union. The credit union is open to all residents and employees in Tarrant County and surrounding counties.Those who qualify for the program, by making $50,000 or less, and set up the account receive matching funds up to $50, said Steven Ashbrook, a certified credit and financial counselor with Catholic Charities.The program, which started a year ago through Catholic Charities' Money School program, has exceeded expectations, with 340 clients opening accounts, Ashbrook said.The goal is to get people to save at least $500 for emergencies, he said."Most people don't have a habit of saving," he said. "If they save some money on groceries, they go out and buy a Domino's pizza. We want them to reach a psychological limit so they feel it's painful to pull the money out because they've worked so hard to save it."Having an emergency fund keeps consumers from using costly payday or car title loans for unexpected expenses like auto repairs, said Don Baylor Jr., senior policy analyst with the Center for Public Policy Priorities in Austin."While Texans haven't been hurt by mortgage lending, they've been ravaged the death of a thousand cuts by payday and auto lending," he said.In 2012, more than 2.5 million Texans took out payday and title loans worth billions of dollars, Widrow said. There are 3,280 alternative lenders registered with the state, including 246 in Tarrant County.The data, collected for the first time last year, is "worse than we thought," he said."Just 1 out of 4 pay it off in one pay period," Widrow said. "The product is failing too many people."Baylor said Sen. John Carona, R-Dallas, will file a bill in the Legislature that would further restrict such loans, including limiting how many times they can be rolled over and requiring documentation of the borrower's income and ability to repay.Lenders charge on average $22 per $100 on the short-term loans, Baylor said."The bill includes language that there will be lower limits for lower-income people so the threshold is 20 percent of their income," he said.Consumers and policymakers can also use a new budget tool from the Center for Public Policy Priorities to see how much it costs to live in 26 metropolitan areas in the state, including Fort Worth-Arlington.Using data from the U.S. Census Bureau and other public sources, the center created the Better Family Budgets program at www.familybudgets.org.In Fort Worth-Arlington, a family with two incomes, two children and employer-covered health insurance must earn a combined $48,168, or about $24 an hour, to cover the basic expenses of food, housing, transportation, child care and out-of-pocket health costs.But almost 30 percent of area jobs do not pay enough for this family to reach the necessary income, according to the budgeting tool.If local workers have to pay for their own health insurance, they must earn $61,272, or about $30 an hour, in combined salaries. And 42 percent of local jobs don't pay enough to reach that.The tool also shows that if that same family of four saved $37 a month for an emergency fund, it would have $2,000 after 41/2 years, which is the average time a job is kept, Baylor said.While these programs are a step toward improved financial health, they are not enough, Widrow said."Unless we do something drastically in the next 10 years, our scorecard will get worse," he said.Teresa McUsic's column appears Saturdays.TMcUsic@SavvyConsumer.netHave more to add? News tip? Tell us
