The Importance Of Financial Health
There I was, a severely myopic four-year-old boy and the sole child of a then 22-year-old single mother, using the handle of a broom to try and flush a furry gray rodent out of our kitchen cupboard. Somewhere, behind the black and white boxes of generic macaroni and cheese that were bought with food stamps, was my furry prey.
Our apartment was on the second floor, above several stores and could only be reached from an unpaved alley by climbing a creaky light-blue wooden staircase with peeling paint. It wasn’t the kind of place one would first choose to live, but mom and I were thankful to have a roof over our heads.
While my mother was always careful with her money, still we weren’t in the best financial health. In the early 1970s, neighboring Detroit was already starting its long period of decline towards bankruptcy and job opportunities were scarce for young women with only a high school education who were trying to raise a small child. Even later when I entered elementary school, and my mother could work a full-time job, we were still living below the poverty line.
The Children Of Today
For society as a whole, the situation has only gotten worse. Divorce rates have continued to climb. The number of single-mother households has tripled since 1960, leaving more young women and their children in a state of poor financial health.
According to research conducted in 2014 by the Center for Financial Services Innovation, 69% of low-to-moderate income single mothers have less than $1,000 in non-retirement savings. These female single-parent households are particularly vulnerable to suffering from stress and poor health. Likewise, according to research conducted by Grinstein-Weiss, Shanks, and Beverly, stress can lead to impaired cognitive development, reduced social interactions, and lower academic performance in children.
Improving Financial Health
Now more than ever, it is important for people to learn sound financial health habits. Households that prepare for unexpected expenses and save regularly with long-term goals in mind are more likely to be financially healthy and have better futures.
It is forty years later, and I am now the father of a young boy. My small family is certainly not wealthy by any stretch of the imagination. However, we save monthly, have six months of salary saved in an emergency fund, and have money invested with eventual retirement as a goal.
Sound financial health means having freedom of choice, more opportunities, less worry and stress, better health, and a brighter future. As for me, financial health also means that my young son has never had to march into battle with a broom handle to fight mice over the food in the kitchen.
A habit of saving monthly, an emergency fund, and a long-term savings goal, are the keys to financial health and a brighter future.
The Mysterious And Alarming Rise Of Single Parenthood In America. By Aparna Mathur, Hao Fu, and Peter Hansen.
Leveraging Innovation To Support The Financial Health Of LMI Families With Children. (PDF) By the Center for Financial Services Innovation (CFSI).
Family Assets And Child Outcomes: Evidence And Directions. By Michal Grinstein-Weiss, Trina R. Williams Shanks, and Sondra G. Beverly.