2010 Income Financial Stability

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					  Promoting Financial Stability

                    Financial Stability
                    Many working families are walking a financial tightrope. Everyday
                    expenses are high, and an unexpected event or emergency can send a
                    household into financial crisis.
                    The United Way of Northern
                                                           Financial stability means new
                    Nevada and the Sierra is helping
                                                           opportunities and possibilities
                    to transform the financial
                                                         such as home ownership, planned
                    uncertainty experienced by
                                                                 retirement, reliable
                    many hardworking families today
   Real median                                              transportation or attending
                    into long-term financial
household income                                             college. It also means that
                    stability. The Financial Stability
  in the United                                           individuals and families become
                    Partnership helps to promote
 States fell 3.6%                                        crisis-resistant, using savings and
                    independence through proven
between 2007 and                                           assets to get through difficult
   2008, from       strategies such as financial
                                                                        times.
    $52,163 to      education, increasing income,
   $50,303. (1)     and building savings and assets.
                    Financial stability is of critical importance; many hard working
                    Nevadans are experiencing unprecedented hardships. Median income
       
                    has fallen, (1) unemployment is high, and our state leads the nation in
                                                                          both bankruptcy and
                                                                          foreclosure. (2)
                                                                          Through the
                                                                          Financial Stability
                                                                          Partnership, United
                                                                          Way is working in
                                                                          our community to
                                                                          help individuals and
                                                                          families gain
                                                                          financial stability
                                                                          and work towards
                                                                          long-term financial
                                                                          independence.
  Promoting Financial Stability

                        Financial Education for Youth and Adults
                        Financial education is the key towards financial independence. By
                        providing people with information and skills to manage their financial
                        resources wisely, they have the tools to make informed decisions
                        regarding personal finances and can create positive relationships with
                        financial institutions. Financial education is especially powerful when it
                        involves action; participants may begin by building a household budget,
 Nevada has one of      opening a checking account, savings account, or signing up for direct
    the highest
                        deposits.
 bankruptcy rates
 (ranks 45th in the     Financial education is important        Mainstream banking products and
 nation), and leads     throughout the lifespan, but              services provide individuals and
 the nation (ranks      especially important for youth.               families opportunities for
    50th) for the       The knowledge and the skills            financial advancement, compared
foreclosure rate. (2)   acquired help lead youth to young           to check cashing services and
                        adulthood with the skills they             alternative lending institutions
                        need to achieve financial               that have higher fees and interest
         
                        independence and personal goals.         rates. Financial education helps
                        The more that individuals and           people to access the opportunities
                        families know, the more likely           in mainstream banking, including
In a recent report,
payday lending and      they are to save, gain assets, and      direct deposit, checking accounts,
predatory mortgage      improve their financial well-being.             and savings accounts.
 lending practices
 were identified as     Increasing Income
 key problems for       When individuals and families increase income, they have more
    Nevadans. (2)       available to cover basic expenses, and can also begin to save. United
                        Way believes that helping families increase and maximize their income
                        is a critical first step to achieving long-term financial stability. There
         
                        are several strategies to help families increase income.




                        Accessing the Earned Income Tax Credit (EITC)
   Promoting Financial Stability

                        The Earned Income Tax Credit (EITC) is a federal income tax credit
                        available to working individuals and families. It is the nation’s largest
                        and most effective federal aid program. As a household’s earned income
                        rises, the amount of EITC also rises, providing an incentive to obtain and
                        maintain employment. The money returned to individuals and families
                        through the EITC is used to pay current bills, gain assets, and build
                        savings. Campaigns to promote the EITC and partnerships to offer free
                        and low cost tax preparation help to bring money back to households
                        and communities.

 The tax refund is      Credit Repair and Debt Reduction
 often the largest      Household income can also increase through credit repair and debt
sum of money that       reduction. Individuals with lower credit scores pay significantly more for
 many households
                        financial services than individuals with higher scores, making good
receive all year. By
                        credit a priority for increasing total income. Credit score is also
splitting the refund
                        increasingly being used by employers, with low credit scores potentially
between checking,
     savings and        impacting one’s ability to get a job. Similarly, reducing debts means
     retirement         that families pay less in financial fees and have more money for current
   accounts, this       and future needs. Connection with credit counseling and financial
   simple change        education helps people to repair credit and make good decisions about
   could result in      borrowing and debt.
 millions of dollars
                        Workforce Development
saved in the U.S. (7)
                        A steady labor market that
                        supports a living wage is an
                        important community goal.
                        Education and workforce
                        training helps individuals to
                        increase their income
                        through job preparation and
                        advancement.


                        Accessing Public and Employer Benefits
   Promoting Financial Stability

                       Each year, hundreds of individuals and families don’t access public and
                       employer benefits. In many cases, this is because people aren’t aware
                       that they are eligible, or don’t understand how to access the benefits.
                       By accessing programs such as Medicaid, Medicare, TANF, WIC, and
                       other programs, working families are able manage difficult times, as
                       well as use their earned income to provide a measure of stability.
                       Similarly, employer benefits such as 401k matching, health insurance,
                       and other options may be available but underutilized by employees.
                       United Way of Northern Nevada helps to connect people to
                       organizations and agencies that provide important access to benefits.
   A majority of
people do not have
    a sufficient       Building Savings
 emergency fund,       Savings are especially critical for helping working families, who often
defined as three to    have no assets or access to credit, remain
six months income
                       financially stable during changes in income
     saved. (6)
                       precipitated by illness, job loss, or other
                       unforeseen circumstances. Building savings is
                       a critical step towards financial stability.
                       United way encourages people to save through
                       savings campaigns. Additionally, partners
  More than one-       working with the EITC encourage taxpayers to
third, or roughly 76   split their refunds, ensuring that some portion
 million adults, say   of the refund is saved or invested.
 they do not have
any non-retirement
      savings. (6)     Gain and Sustain Assets
                       Asset protection refers to a set of tools and strategies that can help
         
                       families retain their assets in the event of an emergency such as job
                       loss, short term disability, illness, or even natural disaster. The tools
                       and strategies for protecting assets include savings accounts, use of
                       public and employer benefits, and insurance. In the case of an
                       unexpected event or emergency, individuals and families are able to
                       retain their assets and avoid crisis.
  Promoting Financial Stability

                      Next Steps
                      Promoting financial stability for individuals and families takes the
                      efforts of the whole community. United Way of Northern Nevada and
                      the Sierra is partnering with individuals, corporate partners, and
                      organizations in our area to support a pathway towards long-term
                      stability. Critical steps include increasing financial literacy, income,
                      savings, and assets. Success can be measured through gains in home
                      ownership, personal savings, and enrollment in technical training or
  The TransUnion      education that prepares people for better paying jobs.
 Credit Risk Index
 ranks Nevada as
the second riskiest
state in the nation
 with a Credit Risk
 Index of 166.21.
         (3)



        



                      Who We Are
                      United Way of Northern Nevada and the Sierra (UWNNS) brings the
                      community together to identify our most pressing needs, produce
                      measurable results, and, thereby, improve lives. UWNNS is achieving
                      meaningful impact here in our community. We use our expertise and
                      knowledge through innovative funding of programs and initiatives that
                      have a positive influence on the people of northern Nevada and the
                      Lake Tahoe communities. Our Mission is to link the community's will and
                      resources to improve lives.




                      Sources
                      1. U.S. Census Bureau. American Factfinder. 2008. 
Promoting Financial Stability

         2. CFED. 2009‐2010 Assets & Opportunity Scorecard. Expanding Economic Opportunity . 
         [Online] [Cited: 9 30, 2009.] http://scorecard.cfed.org/downloads/pdfs/profiles/nevada.pdf. 

         3. TransUnion. TransUnion Consumer Credit Risk Index Continues to Rise, Though 13 States 
         See Decline. [Online] [Cited: 9 15, 2009.] 
         http://newsroom.transunion.com/index.php?s=43&item=541. 

         4. United Way. Achieving Income Stability. Live United. [Online] [Cited: 9 15, 2009.] 
         http://www.liveunited.org/income/. 

         5. Bernstein, Jared. How Much Is Enough? Basic Family Budgets for Working Families. s.l. : 
         Economic Policy Institute, 2001. 

         6. National Foundation for Credit Counseling. Consumer Tips. National Foundation for Credit 
         Counseling. [Online] [Cited: 9 30, 2009.] 
         http://www.nfcc.org/FinancialEducation/consumertips/NecessitySaving.cfm. 

         7. Jeff Zinsmeyer, Timothy Flacke. Build Savings at Tax Time: A Guide to Split Refunds. D2D 
         Fund. [Online] 6 1, 2006. [Cited: 9 30, 2009.] 
         http://www.d2dfund.org/research_publications/build_savings_tax_time_guide_split_refunds 

         8. Center on Budget and Policy Priorities. EIC Participation for 2006. [Online] [Cited: 9 16, 
         2009.] http://www.cbpp.org/eic2009/docs/EIC%20Participation%2006%20prelim.pdf. 

         9. Citizen Times. Earned Income May Bring Refund for Families. [Online] February 2008. 
         [Cited: 9 18, 2009.] 

         10. Internal Revenue Service (IRS). Earned Income Tax Credit. [Online] [Cited: 9 15, 2009.] 
         www.irs.gov. 

				
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