According to a new research by the Kinder Institute for Urban Research at Rice University, only one-third of Houstonians have enough money saved up to cover three months’ worth of living expenditures.
In Harris County, where financial security varies from 21% in the northeast to 47% in the west, this discrepancy is especially noticeable.
The report identifies the main issues that locals deal with, such as medical bills (63%), housing expenditures (76%), and emergencies (80%). Black families face additional challenges since they frequently face structural obstacles to accumulating wealth.
“You’re not going to budget your way to financial security,” says Dan Potter, co-author of the paper and director of the Kinder Institute’s Houston Population Research Center. Spending may be managed and debt can be paid off with the use of a budget, but financial security cannot be achieved without saving.
According to the survey, only 31% of Harris County residents save money on a monthly basis, despite 64% of them doing so. Potter asserted that saving money was crucial, even if it only meant putting aside what was left over at the end of each month. People get closer to financial security as a result.
This pattern is consistent across income levels, races, and ethnicities. To close these gaps, initiatives that promote consistent saving and provide financial coaching are essential.
Young millennial Omozee Agbe-Rankhe, who works in biotechnology, talked about her financial difficulties, which are representative of the issues faced by many Houstonians. Her financial path has not been easy, even if she receives a six-figure salary. When she first moved to Houston from Boston in 2020, the $1,400 monthly rent for a two-bedroom apartment in the Medical Center seemed reasonable.
But as time went on, her living expenses increased, and by 2024, her one-bedroom condo in Montrose was costing $1,600 a month.
According to her, some establishments provide deals like “four weeks free,” but when amenity fees are included, the price remains exorbitant.
When Agbe-Rankhe lost her distant position in quality assurance at the end of 2023, her difficulties were made worse. She had to rely on her $19,000 savings to make ends meet because she was not given a severance payout even though she made over $150,000 a year.
“That money only lasted me about five or six months,” she claimed, adding that she had to take a second full-time remote job to make ends meet due to the financial hardship.
Agbe-Rankhe claims that even with her combined income, she still feels like she’s lagging behind.
She remarked, “It’s like I’m a 15-year-old with 30-year-old bills.” Before concentrating on reestablishing her finances, Agbe-Rankhe made a concerted effort to pay off her debt. Maintaining performance in two demanding positions is still difficult, though.
Potter cites the study’s numerous comments regarding the reasons for people’s financial difficulties as well as the larger problem of financial literacy as a barrier to achieving financial security.
“I don’t think I make enough to bother making a budget,” was the most common response we received. This kind of thinking frequently keeps people from implementing wise financial habits.
To address these issues, the paper recommends systemic adjustments. The gap between education and action can be closed with financial coaching and demographic-specific programs.
For Black people who experience disproportionate financial stress, these resources have the potential to change their lives. Potter advises concentrating on manageable, tiny goals.
According to him, these actions are essential to establishing financial security, regardless of the objective—opening a savings account, putting aside $100, or reaching a milestone like $500.
