Research shows many Alabamians not saving for financial disaster - WBRC FOX6 News - Birmingham, AL

Research shows many Alabamians not saving for financial disaster

BIRMINGHAM, AL (WBRC) -

A new study says three out of five Alabamians are living on the edge of financial disaster and that the majority have no savings or any type of fall back plan.

According to the Corporation for Enterprise Development, 64% of Alabamians have little to no savings to fall back on should they lose their job, experience a health crisis, or encounter some other income depleting situation.

The non-profit group uses a scale they call "liquid asset poverty", a measurement of how many people could live strictly on their savings for three months at the federal poverty level. Andrea Levere, the president of the C.F.E.D., believes the reasons the state ranks so low when it comes to financial security is that close to 60% of residents have bad credit ratings.

"So there are people that are then using alternative sources which are payday lenders and check cashers which are incredibly expensive sources, of credit and further erode their ability to save," said Levere.

And then there are the people that simply don't save, because they don't have a saving account. In Alabama that's over a third of the population. So what can be done to help?

"Get your money out of the mattress as we say, out of the cookie jar and placed into a financial institution," said Michael Milner, Executive Director of Alabama Asset Building Coalition.

Milner's group tries to educate young people about savings, because many don't know understand the concept.

"We have many kids coming out of high school becoming adults that they don't understand the concept of savings and the purposes of savings," said Milner.

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