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Among the questions we asked in the Marketplace-Edison Research poll was how people would handle an unexpected expense. About a quarter of respondents said it would be very difficult to come up with $1,000 to cover a bill, and about a third said it would be "somewhat difficult.

The finding confirms that many people lack personal savings, investments and retirement accounts they can tap into during an emergency.

The numbers are particularly bad for African-Americans, only half of whom have personal savings, compared to 68 percent of the overall population. Under 20 percent have investments or IRAs, with Hispanics not doing much better.

Below is the story of Earnest Pettie, a 38-year-old African-American man who lives in Los Angeles. He describes what it's like to live with no economic safety net.

Pettie's comments have been edited and condensed for clarity.  

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In 2008, right after we got married, my wife, Claire, and I moved from Oklahoma to Los Angeles. I transferred from a video store in Tulsa to a video store here, and weeks after moving here, I lost that job and we immediately were in dire straits economically.

My wife is very sick and requires a lot of medical care and a lot of medicine. I did manage to get a job eventually and that job paid $12 an hour, and we were able to sort of reach a point where we were subsisting more or less. [But] I got laid off from that job during a time when my wife was getting sicker.

Earnest Pettie, pictured above, said a combination of job loss and medical debt pushed him to take out payday loans, which he has since paid back. Twenty-two percent of African-Americans in our poll have used payday loans, compared to 14 percent for the general population.

Once upon a time, I kept this box that had our bills in it and the intent with this box was that, over time, I would take bills out and pay them and we would slowly start to climb out of the medical debt that we were in, but when this box became too big to manage and was starting to spill over, I just decided that we would put that box away and never speak of it again.

Claire and I were asking her parents and my parents and my sister to borrow money a lot, and there is a point at which your parents or your siblings or your friends have given what they can afford to give and what you're asking goes beyond that and is an amount of money that can destabilize their economic situation. Thankfully my wife and I both really love ramen, so we were able to get by on that.



Financial coaching is an individualized approach, so each participant in the study experienced different outcomes based on their situation. But a number of common experiences highlighted the value of a coaching-based approach.

Study participants who were randomly assigned to a financial coach showed improvements in personal savings and debt levels, and in their credit scores. Those who received financial coaching showed an average increase in savings account balances of $1,187 relative to the control group at the New York City site, where people tended to be lower income and struggled to save. At the Florida site, people tended to be a little better off but struggled with high debt loads. The total debt of people who were coached decreased by $10,644 at this site.

In addition to saving or paying down debt, financial coaching helps people pay bills on time and improve their credit scores. Overall, this study provides strong evidence that financial coaching supports families to achieve higher levels of financial security. More research is needed to explore how financial coaching works in different settings, but the flexibility of the model implies this approach should work in a wide range of situations.

New financial coaching programs are testing technology-enabled coaching using websites, text messaging and video chats. Other models use simplified strategies focused on developing a single financial goal and following up on it, rather than a more comprehensive approach.

In Wisconsin, the University of Wisconsin-Extension Family Living Programs and the Center for Financial Security at the UW-Madison have collaborated on multiple projects that have been valuable to the development of financial coaching field. Since 2008, UW-Extension has supported more than 20 workshops that have trained more than 300 financial coaches. Its Financial Coaching Strategies website provides information to develop financial coaching programs. In 2015, alone, UW-Extension-based coaches held 378 coaching sessions and trained or supported 45 volunteer coaches who each provided further services to the public.

Moreover, the Center for Financial Security has developed an easy-to-use financial capability scale for coaches to help people to measure their progress over time. This tool features six questions to inform an eight-point scale that measures an individuals financial capability. The center also maintains a financial coaching mailing list and regularly shares other outreach materials across the state, including financial coaching resource briefs, events and training invitations, a financial coaching newsletter and practitioner coaching demonstration videos.

At the federal level, the Consumer Financial Protection Bureau has invested in the growth of financial coaching through research and the direct funding of coaches for veterans and economically vulnerable consumers nationally, including one site based at a UW-Extension program. This commitment illustrates the interest federal policymakers have to use financial coaching to help people to achieve long-term financial security.

J. Michael Collins is University of Wisconsin-Extension family and consumer economics specialist, director of UW-Madison's Center for Financial Security, and an associate professor of consumer science and public affairs at UW-Madison.



Consumers in the US are overall satisfied with their healthcare and its expense since the Affordable Care Act took effect, but some say the costs are becoming more unaffordable over time, according to the Patients' Perspectives on Health Care survey from National Public Radio, the Robert Wood Johnson Foundation and the Harvard TH Chan School of Public Health.

The research includes information from consumers in Florida, Kansas, New Jersey, Ohio, Oregon, Texas and Wisconsin to represent a diverse selection of states with and without Medicaid expansion under the Affordable Care Act.

"When it comes to healthcare costs, most US adults believe their personal costs are reasonable, if getting costlier over time. Most adults in the US also say healthcare costs are a major problem in their state and more than half believe state costs have increased in the past two years," according to the research report. "In terms of health insurance costs, more than a third of US adults believe their health insurance co-pay, deductible and premium costs have increased in the past two years, while only about one in six say the same of their benefits."

Sixty percent of consumers surveyed said their personal costs for healthcare are reasonable, while 29 percent report their costs are unreasonable, according to the report.

Healthcare costs also cause other financial problems for consumers, according to their survey responses.

Twenty-six percent of adults in the US said healthcare costs led to a "serious financial problem" on an individual basis or for their family.

Among those adults, 23 percent said they have credit card debt that may be difficult to pay off as a result of their medical bills.

Additionally, as a result of medical bills, forty-four percent of survey respondents said they had to set up a payment plan with a healthcare provider; 42 percent said they spent all or most of their personal savings; 39 percent said they were contacted by debt collectors; 27 percent said they were unable to pay for basic necessities; 19 percent said they took out a loan that may be difficult to pay back; and 7 percent said they declared bankruptcy.

Overall, 52 percent of adults in the US report healthcare costs are a "major problem" where they live, compared to 16 percent who say costs are a minor problem, according to the report.

"Most adults in the US also say healthcare costs are a major problem in their state and more than half believe state costs have increased in the past two years," according to the report. "In terms of health insurance costs, more than a third of US adults believe their health insurance co-pay, deductible and premium costs have increased in the past two years, while only about one in six say the same of their benefits."

Follow ACA on Twitter @ACAIntl and @acacollector or Facebook for news and event updates. ACA's LinkedIn Group includes news updates, member discussions, event promotions, jobs and more. Visit the group page and request to join today.

 



Salary sacrifice benefits workers

While little understood, it is widely used and would raise significant amounts for the government.

Andrew Tulley, pensions technical director at Retirement Advantage, said: "Although it looks like changes to pensions tax-relief are off the table for now, there are plenty of inventive ways the Chancellor can use our pensions and savings to help balance his books.

"But I can't see him making changes to tax-free cash as this is the holy grail of pensions, and really would be like turkeys voting for Christmas."

Savings confusion

We get £1,000 of savings interest tax free

It's tough for those trying to get any sort of return on their hard-earned cash as banks continue to offer pathetic interest rates.

The Personal Savings Allowance, which comes into force on April 6, offers a glimmer of hope. It means basic rate tax payers can earn pound;1,000 interest (pound;500 for higher rate tax payers) before they have to pay anything to the taxman.

Read more: What to look for on savings

This is in addition to the ISA allowance which remains at pound;15,240 for the 2016/17 tax year and applies to all non-ISA savings, peer to peer and current accounts.

Susan Hannums, director of independent savings adviser, Savingschampion.co.uk, said: "Although the PSA is a good thing, because according to the government the majority of savers will no longer pay tax on the savings interest.

"But as we near the launch date some details are emerging that paint a not so positive picture regarding how the Treasury plan to collect any tax that is due on people's savings. It seems to be overly complicated and potentially flawed given that new tax codes are being issued now based on interest earned to date.

"Given that savings balances can fluctuate massively in a short space of time, it's not unreasonable to believe some savers will be out of pocket in the first year, or at least until they've corrected their own tax codes."

Earlier this week, the Prime Minister announced a new Help to Save scheme to encourage those on lower incomes to build up a rainy day fund.

It will be launched in April 2018 and will allow those on Universal Credit (with minimum household earnings equivalent to 16 hours at the National Living Wage) or people receiving Working Tax Credits to build up savings of up to pound;3,600 over four years.

Those eligible will be able to save up to pound;50 a month. And after two years the Government will pay a 50% bonus of up to pound;600, followed by another bonus of up to pound;600 two years later.

But, as with everything, the devil will be in the detail and that is yet to be confirmed. There are worries this may mean low earners opt out of longer term pension savings in return for the more flexible, but short-term Help to Save.

Royal London's director of policy, Steve Webb, said: "It is welcome that the Government is looking to encourage people to save, but it needs to be careful people are not incentivised to make the wrong choice with their money.

"While both short-term and long-term savings are important, low-paid workers with spare cash should think very carefully before assuming that the help to save scheme is the best deal for their money."

Benefits changes are coming