IMPACT MATTERS

Bankruptcy is perhaps the most extreme characteristic or outcome of financial instability and Utah’s bankruptcy rate is significantly higher than the national average. What’s more, United Way research shows that a significant number of Utahns are unprepared for both short-term financial challenges and long-term economic security. While declaring bankruptcy may be a last resort for many people, the fact is that too many Utah families are teetering on the edge of financial disaster regardless of whether or not bankruptcy comes into play.

Our report, “Living on the Edge: Utahns’ Perspectives on Bankruptcy and Financial Stability”, proposes strategies for addressing these problems at multiple levels.

The report’s primary recommendation is the creation of a collaborative process that would involve private sector, religious and public sector leadership in developing specific systemic strategies to help every Utah household achieve financial security by focusing on the areas of income and assets, health coverage and costs, and financial education.

In addition, the report recommends some short term strategies that could be implemented by the Legislature to improve the financial stability of low and moderate income families:

• Establishment of a state Earned Income Tax Credit (EITC)
• Permanent funding for federal EITC outreach and Voluntary Income Tax Assistance (VITA)
• Increasing or removing asset limits in Medicaid, Welfare and Food Stamps
• Increasing funding and expanding state-allowed uses for Individual Development Accounts (IDAs)
• Increasing health insurance coverage, particularly for working adults and increasing income through targeted economic development and a modest increase in the state minimum wage.

Finally, there are several immediate actions Utahns can take to improve their savings and financial stability. These include: splitting personal tax refunds or adjusting withholding allowances and/or directing a portion to a savings account; opening a higher education savings account with the Utah Education Savings Plan; enrolling in 401(k) plans through employers and/or enrolling in an Individual Retirement Account and taking advantage of the federal Earned Income Tax Credit (EITC) and Volunteer Income Tax Assistance (VITA) Programs supported by United Way of Salt Lake.

Utahns can also take advantage of the free savings supports, trusted financial information, and preferred financial products available enrolling at Utah Saves. In its effort to address financial instability in a comprehensive and collaborative manner, UWSL has joined with more than 70 nonprofits, financial institutions, credit counseling organizations, employers, government agencies, and faith-based groups to create Utah Saves, a broad-based community effort created to help all Utahns build assets, reduce debt, and create long-term financial security. To date more than 3,000 Utahns have joined Utah Saves and have saved a total of over $3 million in just over one year.

Whether you’ve joined Utah Saves or not, you can also participate in “Save Your Change Week”, November 13-17. This event, in observation of the first anniversary of the Utah Saves program, allows savers to take advantage of accumulated loose change by depositing it in a new or existing account at a participating financial institution. Click here for a list of participating organizations.