1 missed paycheck from disaster

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Telegraph Herald (CFED)
By: Eileen Mozinski Schmidt
September 5, 2013

2013 Assets and Opportunities Scorecard The scorecard, composed by the Corporation for Enterprise Development, assessed 53 metrics to report on how each state ranked in five areas -- financial assets and income, businesses and jobs, housing and home ownership, health care and education. Vermont was ranked first in the nation in terms of residents' ability to achieve financial security, and Nevada had the lowest figures. Iowa was ranked 14th, Wisconsin was 12th and Illinois 33rd.

The analysis of Iowa found that residents, on average, have some of the lowest credit card debt in the nation along with a low percentage of subprime credit scores. "In contrast, Iowa receives a 'D' in businesses and jobs due in part to a rank of 50th in business creation," the report said. "People of color are 2.3 percent more likely to be unemployed compared to white Iowans. A similar disparity exists in home ownership." For more information on the scorecard, visit http://tinyurl.com/l2w5vgd

A quarter of Iowans are living on the brink of financial disaster with little or no savings to fall back on, according to a recent national study.

The majority of the state's residents below the poverty line and many in middle class income brackets are living paycheck-to-paycheck, the Corporation for Enterprise Development reported in its 2013 Assets and Opportunities Scorecard.

The report said 26 percent of Iowans are living in "liquid asset poverty," meaning they do not have enough savings to cover basic expenses for three months after the loss of stable income.

In households earning between $55,365 and $87,756, the report found

17 percent have less than three months of savings.

A leader of the CFED, a nonprofit that bills itself as a promoter of expansion opportunities for low-income families and communities, called the findings "disturbing."

"In order to cope with the recession's continued impact, these families have had to prioritize today's expenses over tomorrow's goals," said Andrea Levere, president of CFED, in a news release.

The numbers were higher among Iowa's neighbors. Wisconsin had a liquid asset poverty rate of 33.2 percent, and in Illinois the percentage was 42 percent.

Nationally, the numbers were worse.

The liquid poverty was

43.9 percent and nearly a third of households - 30.8 percent - did not have a savings account.

Dean Beresford, U.S. Bank's community bank president for the Dubuque market, said the numbers are "striking."

"It's been a huge problem, and continues to be so," he said.

But there also are signs the trend might be declining. Beresford and other local financial leaders report that interest among their customers in savings and financial education programs is growing steadily.

Local efforts

There were as many as 4,000 Dubuque households with minimal access to bank resources and 1,000 not using bank services at all, according to figures released by Bank On Dubuque when the group formed in 2011.

Bank On is a partnership of banks, credit unions, nonprofits and city leaders looking to provide resources to those with little access or knowledge of the financial system.

"We help people who may be struggling financially learn to manage their money and save for the future," said Kevin Ciesielski, senior vice president and retail banking manager for Dubuque Bank & Trust, of the program.

And most local finance leaders said their institutions are now offering educational opportunities for various groups, in the hopes of increasing financial literacy.

At DuTrac Community Credit Union, Jason Norton said the organization has created several financial educational programs for children, including the recent launch of Iowa's first in-school high school credit union at West High School in Davenport, to help build financial know-how.

"Many times, schools do not have the time or resources to dedicate to financial education," said Norton, who said DuTrac also provides classroom presentations on financial management at West High.

Norton, DuTrName

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