Assets and Financial Security

Do you know what assets are? It turns out they are essential for financial security. The report “A Prosperity Grid for North Carolina: Connecting Households and Communities to Economic Prosperity” released by the North Carolina Assets Alliance is helpful for understanding what assets are and the significant impact they have on our families and communities. The report defines assets as resources that generate a financial return. A savings account, college education, a home, retirement savings, or a small business are all examples of assets. Having assets helps families survive tough financial times, plan for the future, and pass on resources to the next generation.

The impact of having assets extends beyond income. They are also important for achieving important economic, educational, health and developmental incomes. They are linked to social  well-being and civic engagement, health and psychological well-being and child well-being. For example, children raised in households with assets are less likely to drop out of high school and have higher educational expectations. Assets are also related to lower mortality and better health outcomes such as increased childhood immunization and improved nutritional status. Children raised in households with assets are more likely to reach key cognitive development outcomes,  maintain improved physical health, and reach key social-emotional development milestones such as having higher self-esteem.

The North Carolina Assets Alliance estimates that 22.5% of households in the United States and 17.5% of households in North Carolina are living in asset poverty, which is “a measure of whether a household can support itself with savings or available assets at the Federal Poverty Level for three months if earned income was lost.” This is of real concern because households living in asset poverty are especially vulnerable to economic downturns and are at a higher risk for losing their middle class status once reaching it.

The New Century IDA has long realized the importance of assets. As stated on our website, the purpose of the New Century IDA program is “to promote personal, economic and financial self-sufficiency by the creation of wealth through asset building, reducing debt, promoting savings, improving credit and development of economic literacy skills.” Through guidance, education, and asset building, New Century IDA helps people in our community break the cycle of poverty and sets them up for success. The financial literacy skills gained through this program are invaluable. If you are trying to break the cycle of poverty in your family or community, partner with New Century IDA today!