INCOME – Financial Stability
Problem #2:
15% of Polk households live below the federal poverty level. 51% live below the “Survival Budget.” A
Survival Budget does not include any savings, leaving a household vulnerable to unexpected expenses.
Background:
1. A family of 4 with no bank account and a gross income of $30,000 a year can spend as much as 6.7% of
their income ($2,000) in annual fees to cash pay checks and pay bills.
2. Low-income families who receive financial education and money “coaching” reduce debt, improve
credit, earn credentials that increase family income, become “banked” and learn to save for
emergencies.
3. Reduced debt improves credit scores. Improved credit scores increase job and housing options and
improve the ability for families to afford a car with reasonable interest and payments.
4. A bare-minimum Household Survival Budget does not include any savings leaving a household
vulnerable to unexpected expenses. A flat tire can keep someone from getting to work, cause them to
lose their job and spin into financial crisis. Savings of even $300 can make a measureable difference.
5. Families with significant debt struggle to pay just the interest on credit cards and loans. The stress
created by financial hardships affects the physical and emotional health of all family members. When a
family gets evicted from their home, they don’t qualify to rent other properties and often shuffle from
family member to family member or live in motel rooms, cars or shelters. Children miss school or are
enrolled in multiple schools and fall hopelessly behind.
6. When a car is repossessed, adults miss work and may lose their jobs. If they try to purchase another
less expensive car, they may not qualify for a loan. If they do qualify for a loan, the interest payments
will be so high that car payments are cost prohibitive. The problems of people living in poverty fall
against each other like dominoes creating situations that seem impossible to resolve. Help is available.