Newark Advocate (CFED)
By: Russ Zimmer
January 30, 2014
The Corporation for Enterprise Development, a nonprofit that advocates financial security for low- and middle-income families, released its annual report that ranks the 50 states and the District of Columbia on how families are thriving, or merely surviving. Ohio came in at 36th, the same rank as in 2013. Here's how Ohio scored in the individual areas of measurement:
One bad turn of luck and even some solidly middle-class families in Ohio could be insolvent in short order, according to a new report on the health of household finances.
Nearly 45 percent of households in Ohio have little or no savings -- less than $5,887 for a family of four -- to cover basic expenses after an unexpected crisis, such as a job loss or medical emergency, according to the Corporation for Enterprise Development's 2014 Assets & Opportunity Scorecard.
"Liquid asset poor," as the report calls it, is a term that applies not only to the majority of those living below the federal poverty line, but this year also includes 24 percent of households earning between $50,881 and $80,952 in Ohio.
The corporation, an anti-poverty organization, ranked Ohio 36th in overall household financial security out of the 50 states and the District of Columbia. That's the same ranking as in the 2013 version of this report, though the share of Ohio households with not enough in the bank was about 43 percent last year. Vermont fared best on the grading scale, while Mississippi came in last.
Nationally, the report singled out mounting student loans -- the average debt for graduating college seniors increased 8 percent to $29,400 from 2011 to 2012 -- among the key obstacles to building wealth for those in low- and middle-income families.
Apprisen, formerly known as Consumer Credit Counseling Service, has 13 locations in Ohio where its counselors craft budgets and plans for clients looking to emerge from a deluge of bills.
Spokeswoman Kathy Virgallito said student loans have been coming up more frequently in those counseling sessions. Other Ohioans also are having to adapt to lower-paying jobs that have replaced many careers, she said.
She urged families to set aside at least a little portion out of each paycheck to be better able to make it through a rough patch. Without a rainy day fund, families can grow dependent on credit cards, which carry their own financial risks, or loans from family members, which can complicate relationships, Virgallito said.
"Sit down with paper and pencil, or maybe an app or computer program, something where you can take stock of where you are at right now (income and expenses)," she said, "and then set a goal in terms of a dollar amount -- how much do I need in my bank account to make it three months -- and then you can use that goal to set smaller goals on how much to save per paycheck or per month."