A recent study conducted by Rice University’s Kinder Institute for Urban Research reveals that only one-third of Houstonians have enough savings to cover three months of living expenses.
This disparity is particularly pronounced in Harris County, where financial security ranges from 21% in the northeast to 47% in the west.
The study highlights key challenges residents face, including emergencies (80%), housing costs (76%), and medical expenses (63%). These struggles are compounded for Black families, who often shoulder systemic barriers to wealth accumulation.
Dan Potter, director of the Kinder Institute’s Houston Population Research Center and co-author of the report, explains, “You’re not going to budget your way to financial security. Budgeting can help control spending and find ways to pay off debt, but without saving, it doesn’t lead to financial security.”
The study shows that 64% of Harris County residents save money, but only 31% do so monthly. Potter said, “It was important to be saving even if that savings involved simply setting aside what was left at the end of the month. That moves people toward financial security.”
This trend holds across race, ethnicity, and income levels. Programs encouraging regular saving and offering financial coaching are critical to addressing these gaps.
Omozee Agbe-Rankhe, a young millennial who works in biotechnology, shared her financial struggles that exemplify many Houstonians’ hardships. Despite earning a six-figure salary, her financial journey has been anything but smooth. After moving from Boston to Houston in 2020, she initially found her rent for a two-bedroom apartment in the Medical Center affordable at $1,400 per month.
However, her living expenses surged over time, with her Montrose one-bedroom apartment costing $1,600 monthly by 2024.
“These places offer discounts like four weeks free, but once you add amenity fees, it all comes back to the same high price,” she said.
Agbe-Rankhe’s challenges were exacerbated when she was laid off from her remote job in quality assurance at the end of 2023. Despite earning over $150,000 annually, she received no severance package and had to rely on her $19,000 savings to stay afloat.
“That money only lasted me about five or six months,” she said, noting that the financial strain made her pick up a second full-time, remote job just to make ends meet.
Even now, with her combined income, Agbe-Rankhe says she feels like she’s playing catch-up.
“It’s like I’m a 15-year-old with 30-year-old bills,” she joked. Agbe-Rankhe focused on aggressively paying down debt before focusing on rebuilding her savings. However, maintaining performance in two demanding roles remains a constant challenge.
Potter points to a broader issue of financial literacy as a barrier to building financial security and heard many responses in the study about why people were struggling financially.
“The number one answer we heard was, ‘I don’t think I make enough to bother making a budget,’” he said. This mindset often prevents individuals from adopting sound financial practices.”
The report calls for systemic changes to address these challenges. Financial coaching and programs tailored to specific demographics can bridge the gap between education and action.
These resources can be life-changing for Black people facing disproportionate financial stress. Potter suggests focusing on small, achievable milestones.
“Whether the goal is opening a savings account, setting aside $100, or hitting a benchmark like $500, these steps are vital to building financial security,” he said.
