Personal Financial insecurity/lack of savings costs cities – BIG bucks

2008 in New Orleans, Louisiana. Photo by Mario Tama/Getty Images.

Diana Elliott

Financially insecure residents can cost cities millions

No matter how robust a city’s economy, its budgetary bottom line is affected by financially insecure residents. In findings released today, the Urban Institute examines the cost of residents’ financial insecurity to city budgets in 10 American cities and finds it ranges from $8 million to $18 million in New Orleans to $280 million to $646 million in New York City.

Financially insecure residents (those with less than $2,000 saved) are less able to recover from a job loss or financial emergency. They can cost cities in lost tax revenue, unpaid public utility bills, and public benefit use.

Looking at those costs proportional to city budgets, we found that residents’ financial insecurity costs cities between 0.3 percent (San Francisco) and 4.6 percent (Seattle) of their total annual budgets. Residents’ economic insecurity can take a toll on city budgets. Here are five reasons cities should care about families’ financial health. Read More

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