"Moving on up"... or Not: Financial Hardships Among Participants in a Healthy Relationships Program

Background. A third of Black and Latino individuals have no financial assets and 66% of households of color are unable to save enough money to sustain themselves for 3 months given an income disruption (PolicyLink, 2016). Yet, low-income individuals are often encouraged to open checking and savings accounts as a necessary step in attaining financial stability, since earnings and accumulated assets determine if families can escape poverty and begin to close the gap in economic inequality. Unfortunately, barriers such as fees, direct deposit, minimum balance requirements and discriminatory banking practices make this difficult to attain. Though evidence of effectiveness is mixed, one approach to addressing such barriers is through financial literacy education, which is often a key component of Healthy Marriage and Responsible Fatherhood programs (HMHRP). Our study explored the effects of a HMRFP on the financial stability of diverse participants. We examined longitudinal trends in difficulty paying bills and participants’ use of checking and savings accounts.

Methods. Data are from a 5-year RCT, between 2015 and 2020, that evaluated a HMRFP for low-income individuals and couples (N=1,275) residing in a large, urban, southwest U.S. region. Treatment group participants (n=662) completed a 7-week program; control group participants (n=613) were waitlisted for 1 year with low level case management services. Sample demographics include: 78% female; 66% Hispanic or Latino; 30% Black, 34% White; 82% ages 25 to 54 years. At pre-test, 65% had a checking account; 42% had a savings account; 21% of respondents reported never having difficulty paying bills, 50% reported difficulty occasionally, and 29% reported somewhat or very often. Treatment effect analyses using multilevel repeated measures (pre-test, post-test, 6- and 12-month follow-up) were conducted. An unadjusted treatment effect estimate was estimated using a difference-in-differences (DD) model.

Results. The proportion of participants who reported having a checking and/or savings account rose from pre- to post-test and then leveled off for both groups, with higher levels of both for the treatment group. Mean levels of difficulty paying bills decreased for both groups from pre- to post-test; however, the decreases remained stable for the treatment group while they fluctuated to the disadvantage of the control group. Additionally, a negative correlation was observed between difficulty paying bills and having a savings account (r = -0.124, p<0.05). The DD model showed that participants in the treatment group had reduced difficulty paying bills relative to the control group (b = -0.111, p<0.05).

Conclusions/Implications. Findings suggest program effects that benefit low-income individuals and families on important aspects of financial/economic stability. Having a savings account may not be a priority when faced with difficulty paying bills, but a checking account can be a transactional tool. Banking options with no/low fees, coupled with financial literacy classes, can help low-income individuals and families better navigate financial insecurity. Future programs focused on increasing financial literacy and building banking skills can reduce economic inequality for diverse low-income families. Strategic partnerships with local minority serving agencies and minority owned banks may reduce barriers to economic mobility.