by Will Hall
The City of Philadelphia Office of Community Empowerment & Opportunity (CEO), in partnership with America Saves and the American Savings Education Counsel, will promote February 26 – March 3, 2018 as “America Saves Week.” When we go from a place of debt to a place of savings, our money stops working for others and begins working for us.
Public support for saving is broad. 59% of Americans report that they enjoy saving over spending; however, 57% do not have enough cash to cover a $500 unexpected expense. While there are many reasons for this discrepancy and no single explanation can entirely reconcile it, low wages certainly explain a big part of the problem, particularly in Philadelphia.
Philadelphia has a median household income of $41,233. The National Low-Income Housing Coalition estimates that the necessary annual income to afford a two-bedroom apartment in Philadelphia at fair market rent is $48,440. With over half of all households not earning enough to cover a need so basic as housing, individuals and families aren’t saving simply because they just can’t afford to. The result is often the high cost debt in the case of an emergency, putting low-income individuals even further from certain financial goals like higher education and home ownership.
Throughout America Saves Week, CEO will be releasing tools and tips to help you make a savings habit. These tools will include incentives from America Saves for committing to save, information on saving for retirement and automatic savings, saving your tax refund, and information on how you can schedule an appointment with the counselors at one of our Financial Empowerment Centers.
Since opening in early 2013, Philadelphia’s Financial Empowerment Centers have helped clients reduce debt by $13.8 million and increase savings $1.7 million. A report from Cities for Financial Empowerment Fund recently found that “[b]oth counselors and focus group participants reported that Financial Empowerment Center services gave them a ‘finances toolbox’—a variety of knowledge and skills that empowered them to navigate complex financial issues and solve financial problems.” Establishing a habit of saving money can be difficult, especially for those with incomes that are insufficient to meet basic needs, but with the right advice, the right amount of support, and a well-crafted plan, savings can be accessible.