Can blacks save money amidst housing costs?
Residents say cycle of working poverty to blame
Carla St.Louis | 1/9/2014, 9 a.m.
South Florida’s Blacks are in a precarious situation when it comes to saving. According to a report, consumers in Miami spend 68.9 percent of their income on expenses, a figure that allocates more than half of their income.
In a report released from the U.S. Department of Labor Bureau of Labor Statistics titled Consumer Expenditures for the Miami Area: 2011-2012, government officials gauged Miami consumers’ annual spending habits and income then compared it to the average of all consumers’ based in the South.
In a climate of rising mortgages and rents, Miami’s housing figure is higher compared to all consumer units in the South accounting for 26.5 percent of their income.
Liberty City residents speak
Despite the figures, financial experts agree it’s possible to save money while others--specifically Liberty City residents disagree.
“It’s alright to begin small when you start a savings plan,” said Gail Hillebrand, the Consumer Financial Protection Bureau’s Associate Director of Consumer Education and Engagement. “If you save just $10 a week, you will have over $500 at the end of a year.”
She suggested setting up an automatic transfer to a savings account on payday as a method of saving or retaining a tax refund for a rainy day.
Latonya Riles, a single mother whose absorbing her two collegiate sons’ expenses paints a candid picture of the financial environment in Liberty City. A manager at Worth It, a women’s clothing store, earning $8 hourly, the bulk of Riles income goes towards her sons’ education and her housing.
“For one single parent it’s very difficult to save money,” she said. “I have two sons in college who I regularly send care packages to and pay their bills.” She had to downsize from her house to a duplex in order to make ends meet. Despite working full-time, Riles still has setbacks explaining, “There was a period when I was sick, and during that period I lost my car insurance.” Riles shared that she regularly “creates budget plans, cut corners and limits frugal purchases” in order to spend her income solely on necessities.
Housing too high,
income too low
“I think these numbers illustrate two things: that housing costs in South Florida are too high, and that incomes are too low,” explained Oliver L. Gross, president of the New Urban Development.
An advocate who specializes in community revitalization and economic development from a holistic approach, Gross found the amount spent on housing incompatible considering South Florida’s unemployment numbers.
“In many cases, people are struggling just to keep a roof over their heads, with little left over for other necessities, including utilities and food,” he said. “Fighting poverty becomes more and more difficult when a lack of affordable housing exists at the same time as record joblessness, particularly in already struggling urban communities.”
Affordable housing, few & far
Although Miami-Dade County lost large funds in the real estate market due to homeowners inability to pay their mortgages, a housing expenditure below 28 percent is reasonable according to CEO Barron Channer of BACH Real Estate.