Wanted to make our webinar "Housing and Personal Finance" but couldn't make it? Check out the full seminar below.
In this video, Marshall Moore from On Tap Credit Union delves into the critical intersection of housing and personal finance, shedding light on the underlying economic trends and community impacts. The housing expense ratio, a fundamental concept in financial education, is a starting point. It suggests that housing costs should ideally be below 30% of gross income, though some argue for net income as a better measure.
Our analysis explores why many struggle to adhere to this guideline, especially in high-cost living areas. Financial education gaps contribute significantly to poor decision-making, compounding the problem. We examine how Jefferson County's educators, despite earning a maximum starting salary of just under $70,000, face challenges finding affordable housing within the 30% rule. Condos priced at $350,000 require much higher monthly payments, highlighting a substantial financial gap.
The housing issue extends beyond personal finances, affecting businesses and communities. When workers can't afford to live near their jobs, businesses suffer from decreased talent retention and attraction. A community-wide approach is necessary to address these broader implications effectively.
Historical economic data reveals a different landscape compared to past decades. The personal savings rate has dropped from above 10% in the 1960s to around 3.5% today. Contrary to misconceptions about today's younger generation, inflation-adjusted disposable income has decreased, emphasizing the need for modernized financial strategies.
Comparing economic factors from 1980 to today shows significant shifts. While the cost of education has soared, starting salaries have lagged, exacerbating financial pressures. Understanding these changes is crucial for developing sustainable financial solutions.
This blog aims to provide insights into the current economic challenges and highlight the importance of financial education and community involvement in creating a more stable and equitable future.
Interested in booking a financial education session with Marshall? Book here.