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Finances: How Can My Family And I Survive?

By Rafael Ramos, Career Coach/East Austin Children’s Promise on 08/12/2013 @ 07:54 AM

Tags: Children's Promise, Community Empowerment, East Austin

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Today, there are financial literacy and planning workshops given by nonprofits, banks, credit unions and others. While there is certainly a lot of interest on the part of participants, attendance is low.

One thing that may affect turnout is the way the topic is marketed. Consider terms like, Financial Literacy, Financial Planning, Asset Allocation and Asset Management. They all assume one thing: That you have some money. In reality, what is needed is a title that everyone can relate to like, “How can my family and I survive?”

People are interested in learning financial literacy, but they want to learn how to solve a particular problem facing them right now, whether it’s unemployment, under-employment, or school loans. When you start throwing curve balls at them like being a single parent or having a medical disability, they become especially eager for advice. Often re-framing their problem into a goal is helpful. If there’s anything that can give a ray of hope, it’s the question, “What would you like?” From there we take small steps and before you know it, we have a better outlook on our lives.

Liz Weston of MSN Money says having just $500 dollars saved can change your outlook and even your health! “That’s enough to avoid bounce fees, steer clear of payday lenders and cover most minor emergencies so you don’t have to add to your credit card debt,” Weston says.

The research of Stephen Brobeck, executive director of the Consumer Federation of America, concurs. Brobeck examined savings studies conducted between 2004 and 2008, focusing on the savings habits of households that earn less than $50,000 a year (that’s about half of all U.S. households). There were stark differences between people who had less than $500 saved and those who had more. Those with less than $500 saved were far more likely to have a negative financial experience, such as:

  • Struggling to pay monthly bills.
  • Bouncing checks.
  • Carrying credit card balances.
  • Using high-cost loans, such as payday advances, car title loans or pawnshop loans.

It’s a fact that income makes a big difference in who saves and who doesn’t. The less money you make, the more likely you are to have inadequate savings. The income groups reporting less than $500 saved were:

  • 64% had incomes under $25,000.
  • 38% had incomes between $25,000 and $50,000.
  • 17% had incomes over $50,000.
  • 5% had incomes over $100,000.

Saving $500 dollars is not a magic number that will solve all a family’s problems, but it can go a long way towards giving you a sense of control over your finances and teaching you how to save. Have a goal of what you want to achieve with your money and a way to budget what you earn. It may seem difficult at first, but just begin with a single step.

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