One-third of Houstonians, according to a recent Rice University research, have enough money saved to cover three months’ worth of living expenses—a criterion that’s frequently used to gauge financial security.
The Kinder Institute for Urban Research at Rice University, with support from United Way of Greater Houston, released the study on Monday. Examining potential connections between Harris County citizens’ budgeting and saving habits and their financial security was the aim of the study. More than 5,200 people who live in Harris County, which includes Houston, provided data for the study.
Among the report’s authors was Dan Potter, director of the Kinder Institute’s Houston Population Research Center. The results of the study, he said, further support the need for greater financial education.
“Financial security is a critical determinant of health, education and overall well-being, yet the research highlights a substantial gap in residents’ ability to build the safety net required for resilience and prosperity,” Potter stated in a statement. Over 40% of people living in the Houston area are unable to pay for a $400 emergency bill, and the percentage is much greater for Black and Hispanic citizens. Our findings highlight how urgent it is to develop initiatives that address structural obstacles to financial stability in addition to promoting saving.
Third of Harris County adults, according to the study, claimed to be able to “sustain themselves on savings alone for 3 months or more.”
RELATED: Nearly 50% of low-to-moderate-income Houston area residents believe that electricity costs are too high.
However, the study found that depending on the area, the likelihood of financial stability can vary significantly. The rate of financial security varied by region, with the far northwest of Harris County having a rate of 45% and the northeast Harris County having a rate as low as 21%.
The study also discovered that income had an impact on financial stability. 23% of Harris County people earning between $35,000 and $49,999 reported being financially stable, whereas the majority of those earning above $100,000 reported being financially stable. 15% of people with even lower incomes—less than $25K—thought they were financially secure.
Information on race and ethnicity was also gathered for the study. While well than half of white and Asian respondents said they were financially comfortable, only around one in five Black and Hispanic residents said the same.
The top three factors cited by Houston-area residents as obstacles to saving were debt, housing prices, and unforeseen auto or home expenses. The study found that while about two-thirds of the population employed some kind of budget, there was no correlation between budgeting and either greater or lower financial stability.
Below is the complete study: