Life On The Financial Edge: 'One Crisis Away' From Disaster
One out of every three North Texans is walking a financial tightrope and could be knocked off by just one crisis; a medical emergency, an eviction, a job loss.
In KERA’s new series One Crisis Away, we introduce a concept known as asset poverty.
“This really measures the ability of a household to exist at the poverty level for just three months if their main source of income is disrupted,” says Andrea Levere, president of the Corporation for Enterprise Development.
The disruption she mentioned could be anything. A layoff, an unexpected surgery, a loved one’s legal fees after an arrest.
Asset poverty doesn’t necessarily mean you’re getting public benefits, or someone in your family lost a job. Levere’s colleague, Ida Rademacher, explains: “I think what the under-story is about is if you do have a financial crisis, what is the cushion you have to fall back on?”
And the answer for many North Texans is, not enough to last more than 90 days.
There are some specific issues plaguing our area. For example, thousands of Texans don’t have bank accounts, so they spend hundreds of dollars a year cashing checks, loading pre-paid cards and making rent-to-own purchases.
Another major problem; people who go without health insurance. Nearly 25 percent of Texans are uninsured, and as Levere explains, that can have a disastrous ripple effect.
“So you don’t have access to health insurance. You then have a major health incident, you then have to declare bankruptcy because of it, then your credit score reflects that, and you spiral down again,” Levere says.
As many as 40 percent of folks in Dallas are one crisis away, and Rademacher says, fixing the problem is more than any one family can handle.
“If half of the population really is one paycheck away from having to figure out a whole series of strategies to fix this gap, then that’s a community problem,” says Rademacher.
And over the next several months, we’ll follow families in our community. Families trying to recover from unemployment, survive retirement, beat back debt, and fight their way through a medical emergency.