Savings

The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include public assistance, employment, inequality, and personal finance.

Editor's note: A version of this post originally appeared on New America's In the Tank blog.

In her new book, Pound Foolish, journalist and author Helaine Olen takes a deep dive into the world of America's personal finance industry and emerges with a wake-up call for anyone who has ever taken advice from self-described personal finance gurus like Suze Orman. According to Olen, American people have too often been given bad advice on their finances, offered by salesmen with conflicts of interest. We've been sold a series of myths that enrich the purveyors and leave the rest of us struggling to make ends meet amidst the surging costs of housing, health and education --  and income stagnation. Olen's book ends with a call for Americans to open up about their financial difficulties. She says a more honest conversation can help to pave the path for positive change in the financial service marketplace. What would a candid conversation look like – and how do we begin to change a culture that treats personal finance as a taboo topic? Following the public event we had with her earlier this week, I sat down with Olen to explore how to start that new conversation, and what it looks like today, on this In the Tank podcast. Have a listen here.

Also be sure to check out Olen's piece from earlier this week for the Guardian in which she looks at the retirement security crisis and the failings of the 401(k) in greater depth.

The Asset Building Program hosted journalist and author Helaine Olen yesterday for a conversation about her new book, Pound Foolish: Exposing the Dark Side of the Personal Finance Industry.

The Asset Building Program’s Justin King began the conversation by noting the extraordinary losses in wealth for American families during the Great Recession, which correlate with the growing public attention to the wealth gap. A common refrain is that our collectively insufficient level of savings is just part of “American culture” – but King argued this framing fails to recognize the role of policy in shaping culture. The personal finance industry communicates the message that Americans’ financial troubles are the result of personal failings, when in fact, they are working within a system of policies that often sets them up to fail.

Editor’s note: This post was authored by Vishnu Sridharan, Director of the Make Your Path (MY Path) Program at Mission SF Community Financial Center in San Francisco, California and a former member of the Global Assets Project at New America. 

To mark the launch of Financial Literacy Month in April, the Council for Economic Education will release a new set of standards to establish what youth should know about money by the end of 4th, 8th, and 12th grade. The state of Florida is considering passing a bill that requires that “financial literacy must be included in high school graduation requirements.” An increase in attention to financial literacy is a positive development. However, growing research shows that financial literacy alone is “not sufficient,” and that what genuinely impacts the economic trajectory of youth is the ability and opportunity to act on their knowledge. As such, we might be better off focusing not on financial literacy initiatives as such, whose primary aim is to impart information, but instead on financial capability initiatives, which also include a strong behavioral component.

Last month, we wrote about a recent push in Hawaii to eliminate the state’s TANF asset test. A new report and proposed legislation suggest that similar changes are on the horizon in Arkansas. Let’s explore why it’s so important that these reform proposals are emerging right now.

Fresh off the presses are two reports highlighting the dismal state of college affordability: the first was released Wednesday by the State Higher Education Executive Officer's Association showing that college costs rose 8.3 percent last year and the second from Sallie Mae released last Tuesday (slightly less fresh) showing that less families are savings for college and thos

The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include wealth inequality, the sequester, housing, employment, debt, and the safety net.

This week, I was pleased to have two opportunities to talk about some new data that came out recently on the racial wealth gap from the Institute for Assets and Social Policy.

On Wednesday, I spoke with Tanya Free, the host of the show Tanya Free and Friends, which airs live weekly on Richmond, Virginia's AM WCLM station. The guiding question for this week’s show was “How much does race still matter?” The two-hour segment covered a lot of important issues, including the rise of extremist groups, developing more black-owned businesses to support community wealth-building, and the role of consumer protection in the housing crisis and recovery. Listen to the racial wealth gap part of the conversation by pressing play and dragging the slider to the 23 minute mark. During the conversation, the show hosts and I agreed that racial wealth disparities in this country are complex in origin, but that we do have some promising strategies to address this inequality. For example, Tanya Free and her co-hosts pointed out a few ways individuals can begin to build up savings, including placing more emphasis at the family level on the importance of saving, starting the saving process as early as possible and not waiting until you think you’re wealthy to begin that process. They also recommended seeking help from a trusted and knowledgeable advisor when possible.

Today, New America released a Sidebar podcast in which I discussed the IASP study and origins of the racial wealth gap with Elizabeth Weingarten, New America's assistant editor, and Reniqua Allen, a New America Fellow who studies the black middle class. We spoke about how racially discriminatory policies gave rise to many of the disparities we see in homeownership rates, employment segregation, and residential segregation. Reniqua Allen emphasized the importance of unions and public sector jobs in ensuring economic stability and mobility for all Americans but particularly Americans of color. We also fleshed out the important distinction between wealth and income.

I first saw this video on the Facebook page of a friend I consider to be wildly apolitical. Now it's been seen 3.5 million times, and been written up by Ezra Klein, Andrew Sullivan, The Atlantic...that's right, a video about wealth inequality has gone viral.

We've been talking about wealth inequality for years, so it's really exciting to see someone else reframe information that's been out there and use new methods to drive the attention of the public to a critical issue.