Results of this data snapshot show nearly half (45%) of households in major American cities (with population over 200,000) are living in a state of persistent financial insecurity with almost no savings to cover emergencies or plan for the future. CFED defines these financially insecure households as "liquid asset poor," which means they lack adequate savings to cover basic expenses at the federal poverty level for even three months in the event of an emergency, such as a job loss or health crisis. The inability to bounce back from financial pitfalls is not only a detriment to families but also to the economic growth of the cities in which they live.
Additionally, an average of 31% of urban households are "asset poor," meaning that the few assets they may have, such as a savings account or durable assets like a home, business or car, are overwhelmed by their debts. These asset poor families, whether they lack emergency savings, durable assets or both, are forced to prioritize today's expenses over tomorrow's goals. Many also lack even the basic tools to save for a rainy day. On average in major cities, approximately one in seven (15%) of households is unbanked, meaning they have neither a checking nor a savings account, and almost one in four (24%) of households is underbanked. Although these households have a checking or savings account, they also rely on
alternative financial services such as high-cost payday loans.