For many households in Southern Nevada, the COVID-19 pandemic was not an event they financially planned for. It crippled our primary industries and resulted in job loss for the masses. Layoffs experienced during the pandemic left many across the country struggling to make their housing payments, many are food insecure and struggled to survive with Clark County’s unemployment rate peaking at 33% in 2020 during the mandatory closures. The loss of employment and income during a major life event poses a threat to housing stability, which leads to a larger ripple effect for communities, causing more uncertainty for households. Most Americans do not have a financial cushion for emergencies and do not know where to start to create a plan.
Angela Phillips
During the pandemic, stimulus payments and eviction moratoriums provided some short-term relief, but financial planning knowledge provided by programs like Habitat for Humanity Las Vegas’ Financial Peace Project helps participants develop good financial habits leading to long-term success. The Financial Peace University curriculum has been taught for nearly 25 years to over 5 million people worldwide. According to the Ramsey Solutions Q1 State of Personal Finance study released in May 2021, 34% of Americans didn’t believe they would recover from the financial setback of the pandemic. Forty-two percent of those with consumer debt say the pandemic was a financial setback they don’t believe they can come back from, compared with only 27% who are consumer debt-free.
Providing financial education and the tools to help people increase their financial literacy is crucial for supporting affordable housing and contributing to community development in several ways:
• Empowering informed decision-making. Financial education prepares individuals with the knowledge and skills to make informed decisions about their finances. This includes understanding budgeting, saving, investing and debt management. With this knowledge, people are better equipped to make sound financial decisions, which can lead to more stable housing situations and overall financial well-being.
• Sustainable homeownership. Homeownership is a significant aspect of affordable housing. Financial literacy can help people better understand the mortgage process, interest rates and the costs associated with homeownership. Informed homeowners are less likely to face foreclosure or default on their mortgages, contributing to the stability of the housing market.
• Access to affordable loans. Financial education can improve people’s credit scores and financial histories. This, in turn, can make it easier to access affordable loans, including those offered by community development financial institutions. These loans can be essential for low-income individuals and communities seeking to build or maintain affordable housing options.
• Savings for down payments. Increasing financial literacy can encourage people to save for down payments on homes. This reduces the barriers to homeownership and can lead to a more stable and secure living environment.
• Understanding government-assistance programs. Many governments offer housing-assistance programs, but these can be complex and difficult to navigate. Financial education helps people understand the eligibility criteria, application processes, and benefits of these programs, making it easier for them to access affordable housing options.
• Community investment. Financially literate individuals are more likely to invest in their communities. They may participate in community development initiatives, support local businesses and contribute to the overall economic health of the area. This can lead to increased job opportunities and a stronger sense of community.
• Support for nonprofits and community organizations. Nonprofits and community organizations working on affordable housing projects can benefit from financially informed supporters and volunteers. These individuals can better understand the organization’s mission, financial needs, and the impact of their contributions, leading to more effective fundraising and advocacy efforts.
• Preventing predatory practices. Financial education can help people recognize and avoid predatory lending practices that can lead to housing instability and financial decline. This knowledge is essential for protecting vulnerable communities from exploitation.
• Reducing financial stress. Housing instability and financial insecurity often go hand in hand. By equipping people with the tools to manage their finances effectively, financial education can help reduce financial stress and promote overall well-being, which is vital for community development.
Financial literacy plays a critical role in supporting affordable housing and community development by empowering individuals and families to make informed financial decisions, manage their resources effectively, and advocate for policies that promote housing affordability. Promoting financial literacy can be a valuable strategy for addressing housing challenges and fostering stronger, more resilient communities.
Angela Phillips is executive director of Habitat for Humanity Las Vegas.
Click HERE to subscribe for free to Vegas Inc’s BizClick newsletter. Stay up to date with the latest business news in Las Vegas sent directly to your inbox each Monday.
This story originally appeared in Las Vegas Weekly.