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Financial Security for All (Roosevelt County)

Plan Goal

Improve the financial literacy of Roosevelt County citizens through better money and time management, increased savings, and wise use of credit.

Situation Statement

Financial security is important to individuals, families and communities. Financial literacy is important for all income levels. It is especially critical for limited resource families. The fewer the resources the less room to make financial errors or deal with emergencies such as medical, dental, loss of job or death of a wage earner. The household assets of communities are an indicator of a region’s economic stability and prosperity. The 2003 median household income in Roosevelt County was $27,247 below the state level of $35,091. In Roosevelt County 21.5% live below the poverty level. (US Census Bureau 2003)

Many of our young adults do not know how to manage their finances and many college students graduate with a high debt load due to student loans and overuse of credit cards. The average debt for a family with one or more credit cards is over $8,000.

Residential real estate is the biggest holding of wealth for most households. Credit problems and lack of savings can make it difficult for families to become home-owners. The home-ownership rate for New Mexico families in 2004 was about 70% which is comparable to the national average. But there is a shortage of affordable housing in many areas and lower income families have difficulty finding housing in their price range. This has been exacerbated by the increase in home prices in the past few years.

As the Baby Boom generation (those born between 1946 and 1964) reaches retirement age, the growth of the population 65 and over is projected to increase. In 2000, 11.6% of New Mexico’s population was 65 and over and 15% of those were below the poverty level. The next 10 to 25 years will be the Boomers last opportunity to save for retirement, yet the national savings rate for 2000 was 2.6% of income. One-half of American families have accumulated less that $1,000 in net financial assets. The number of individuals who need to make decisions regarding their retirement savings, both in and out of the workplace, is increasing as companies change their defined benefit retirement plans to defined contribution plans. The financial products available, including investments, mortgages, payday loans and other loan products, have become more complex.

Recent national and regional disasters have shown the need for preparation for emergencies such as floods or fires. Preparation includes an evacuation plan and emergency supplies. There also is a need to have legal financial papers organized and available in the event of evacuation to assist individuals and families cope and recover in a timelier manner.

Approximately 60% of Americans die without a will and even fewer have advanced health directives. Some reasons given for this is the belief that family will take care of this, the laws are already in place, discomfort with the topic and not knowing where to get the information needed. The lack of preparation can leave family members of all ages struggling to take care of a loved one’s estate in a time of grief.

How individuals and families spend and save their money impacts the overall economic picture. New Mexico’s bankruptcy rate in 2002 was one in 78.8 households (up from one in 97 households in 2001). There were 9,274 bankruptcy filings in 2002, 92% of which were households and the indications are that the number is still increasing. Changes in the bankruptcy laws which restrict access to bankruptcy may reduce the number but not the need. Overuse of credit and the increased number of bankruptcies in the state impact the business community and other citizens as the economy absorbs this loss.

The economic stability of the state and the nation is built on the financial stability of individuals and families. This in turn depends on educational attainment, availability of jobs and individual financial practices.

Target Audience and Actions

**Target Audience**
All Roosevelt County citizens including individuals, families, youth, seniors.
All Roosevelt County citizens particularly limited resource families.
Agencies that work with Roosevelt County consumers and families
Policy makers
Mass Media

**Actions**
Basic money management classes
High School Personal Finance Program
CreditSmart
Legally Secure your Financial Future
Disaster Readiness Financial issues
Other programing that includes time and financial management

Short-Term Objectives

70% of participants will increase knowledge of basic money management practices
70% of participants will increase knowledge of credit costs
70% of participants will recognize the importance of personal records, a valid will, durable power of attorney and other estate planning documents as a result of the legal education program
50% of participants will plan to get their credit report
50% of participants will plan to change one financial practice
40% of teens will increase knowledge about credit costs
40% of teens will plan to start saving

Medium-Term Objectives

40% of participants will have obtained their credit reports after one month
40% of participants will have made one financial change after one month
30% of participants will have taken steps to save for retirement within six months
20% of teens will have started a savings plan within two months
40% of participants will develop a list of important documents related to being legally secure to be organized and or updated within two months
30% of participants will prepare at least one of the recommended documents within three months of attending the legal education program

Long-Term Objectives

30% of participants will have increased savings after two years

Evaluation Plan

High School Financial Planning Program evaluations, CreditSmart surveys and life skills surveys will be used for short term and medium term objectives.
Long-term objectives cannot be measured without additional funding.
Pre-post tests for increase in awareness, knowledge and intention to take action.