In Los Angeles, 19% of households live in poverty, but nearly three times as many (52%) are financially vulnerable. These “liquid asset poor” households do not have enough savings to live above the poverty level for just three months if they lose a job, face a medical crisis or suffer another income disruption. Communities of color fare even worse: 64% of African-American households and 76% of Hispanic households are liquid asset poor.

Of households earning between $50,000 and $75,000 annually, 49% are liquid asset poor. These households live in a state of persistent financial insecurity, one emergency away from falling into debt or even losing a home.

The inability to bounce back from financial pitfalls not only hurts Los Angeles families, but also stifles the city’s long-term economic growth.

These findings are part of a new data analysis from Family Assets Count, a project of CFED and the Assets & Opportunity Initiative, in partnership with Citi Community Development and Koreatown Youth and Community Center. The analysis spotlights a range of challenges confronting all types of Los Angeles families:

• Over half (51%) of the households headed by someone with an Associate’s degree or some college are living in asset poverty. That number drops to 26% for those households headed by someone with a Bachelor’s degree. This highlights the importance of encouraging educational attainment in combination with financial capability services for families, especially as Los Angeles focuses on college completion and educational attainment.
• 13% of households do not have a checking or savings account, nearly twice the national rate. And, one in five households have a checking or savings account, but still relied on alternative financial services such as check cashing or payday loans in the past year, meaning they are paying far too much to access their hard-earned money.
• 55% of homeowners are spending more than one-third of their income on housing and 62% of renters are “cost-burdened,” meaning their monthly rent and utility costs exceed 30% of their income. Meanwhile, one in three families are “asset poor,” meaning they lack sufficient net worth (what they own minus what they owe) to subsist at the poverty level for three months in the absence of income.

Taking on these challenges will require focus and collaboration across policymakers, advocates, practitioners and philanthropists to strengthen programs, services and policies that improve family financial stability in Los Angeles. Ensuring pathways to earning decent wages and sustaining employment, saving for emergencies, investing for future goals and protecting assets is important for families and critical to sustainable economic growth.

Through cutting edge data, tools and resources Family Assets Count leverages the power of cities to improve financial stability for families and advances programs and policies that reduce barriers and encourage families to save and build assets. For more information and data visit FamilyAssetsCount.org