A.L.I.C.E.
The Problem
Asset Limited, Income Constrained, Employed
42% of American Households Are Falling Behind Financially Every Month
For far too many families, the cost of living outpaces what they earn. These households struggle to manage even their most basic needs – housing, food, transportation, child care, health care, and necessary technology.
When funds run short, cash-strapped households are forced to make impossible choices, such as deciding between quality child care or paying the rent, filling a or fixing the car.
Hiding in Plain Sight
America’s Biggest “Hidden” Problem
The biggest problem facing America today is not what you might think. It is a silent, “hidden” problem that is everywhere we turn, and we don’t even know it. This problem is that 42% of American households are living paycheck-to-paycheck, and most have a negative cash flow. They have less than $400 in emergency savings and spend 25% of their income servicing high interest consumer debt. These are your neighbors, family members, and friends, salary, as well as hourly.
Living Below the ALICE Threshold
ALICE, an acronym for Asset Limited, Income Constrained, Employed, is a new way of defining and understanding the struggles of households that earn above the Federal Poverty Level, but not enough to afford a bare-bones household budget. These short-term decisions have long-term consequences not only for ALICE families, but for all of us.
Through research from the United Way ALICE Project we can now see the percentage of households in each state which are living below the ALICE Threshold and it currently ranges from 31% to 51% depending on the state.
What Does ALICE Look Like?
Meet Charlene
Charlene is a northern New Jersey mother who works full time and is raising her two young sons. While Charlene works to improve the quality of area child care centers she struggles to provide for her family. Charlene is ALICE: Asset Limited, Income Constrained, Employed.
Did You Know?
Did you know that there are more payday lenders in the U.S. than McDonalds?
Or how about the fact that according to the Financial Health Network, financially stressed American’s pay $173 Billion in Fees each year.
Monthly Income and Expenses
No Means To Escape Basic Survival
The Root Issue – High Interest Consumer Debt
“The average American Household is currently spending 25% of their take home income servicing high interest consumer debt.”
Unless we help these families bridge their cash flow without increasing high-interest consumer debt we will continue to be addressing negative symptoms of the household budget being out of balance rather than the root cause of it in the first place.
The Root Issue – High Interest Consumer Debt
“The average American Household is currently spending 25% of their take home income servicing high interest consumer debt.”
Unless we help these families bridge their cash flow without increasing high-interest consumer debt we will continue to be addressing negative symptoms of the household budget being out of balance rather than the root cause of it in the first place.