Asset study is revealing barriers to financial empowerment

Burst for Prosperity Stories – Building Financial Assets Study

“…we are taking an in-depth look at the role that the financial capabilities of both service providers and their clients play in long-term asset development.”

Financial Assets are the building blocks of economic security. In order to build assets, it is crucial to possess the knowledge and skills to make healthy financial choices. Numerous studies have revealed the critical importance of financial assets for long-term economic security. However, a gap in social science research persists. We still know very little about what most effectively helps people assemble those critical “building blocks” in order to move out of poverty permanently.

Burst for Prosperity’s Building Financial Assets Study seeks to address this critical knowledge gap and develop a proven practice tool for social service agencies to help their clients build financial assets. To do this we are taking an in-depth look at the role that the financial capabilities of both services providers and their clients play in long-term asset development.

Early results from our study indicate the presence of system-wide barriers to the integration of financial empowerment strategies in service delivery systems.

In the first phase of the study, Burst for Prosperity conducted a baseline assessment of 300 social service providers in Washington regarding their financial literacy and capabilities as well as their feelings about their ability to provide financial counseling to their clients. The findings point to significant barriers to asset development related to the financial capabilities of service providers.

While service providers reported high self-perceptions of their financial capabilities, they have similar to lower levels of financial knowledge pertaining to credit, savings, debt literacy and other financial matters than the general population.The baseline investigation found that:

• Nearly 1 in 3 service providers don’t use a personal budget or track their expenses
• 1 in 4 providers don’t have emergency funds, long term savings goals and do not save and invest regularly.
• 2 in 5 do not feel equipped to provide financial counseling nor do they know where to refer clients for additional help.

Other barriers relate to agency systems, policy and operations. For more information about the study, read the Building Financial Asset Study Fact Sheet.