Personal Finance

Economists have several methods for measuring financial stability within a society. One such measure is “financial fragility,” or a household’s ability to access emergency funds from any source in a moment of crisis. It is a stark measure of assessment, for sure, but it is revealing of the level of vulnerability — and potential anxiety — with which many workers and their families presently cope.

The housing and investment crisis beginning in 2008 revealed some of the financial dysfunction in American households. Research has shown that those with lower financial literacy are less likely to have a checking account, emergency fund or retirement plan, and are more likely to take pay-day loans, pay only minimum credit card balances, take on unaffordable mortgages and carry debt.

Firms such as check-cashing companies and payday lenders allow customers who don’t have bank accounts to cash checks, wire money or pay utility bills. While convenient, such services come at a cost. Payday loans typically cost 18% for a two-week term, the equivalent of 468% annually.

Many colleges and universities nationwide continue to come under increased pressure to justify the value of a college degree. In particular, more policymakers are pushing for accountability among public institutions and making funding decisions based at least partly on the employment rates and salaries of recent graduates.