Financial Capability and Asset Building: Building Evidence for Community Practice

Abstract

Community practitioners have long been involved in helping clients manage their household finances and gain financial capability and build assets (Cruce, 2001; Stuart, 2013). Toward these ends, practitioners work in diverse community-based organizations to assist clients to acquire, maintain, and manage income; obtain education and training to enter the workforce; acquire and maintain employment; manage their finances; and many other direct services. Informed by their first-hand experience with clients, they also develop and direct workforce development, financial management, and asset development programs; evaluate their work; and disseminate their findings to other practitioners. Many household financial problems are rooted in systemic forces, such as poverty, discrimination, and poorly designed and unsafe financial products (Karger, 2015). Practitioners, therefore, also advocate in local communities for affordable and appropriate financial products, as well as empower and mobilize financially vulnerable people and communities to engage in policy practice to advance favorable social conditions, such as a higher minimum wage and affordable, accessible healthcare so that families can become more financially stable and secure. The diverse work just described occurs within the context of communities comprised of working families challenged by today's financial realities. America's working households are struggling with low financial security (Wiedrich, Sims, Weisman, Rice, & Brooks, 2016). Despite an economy in the United States and globally that has largely recovered from the Great Recession, the majority of US households are facing their own increasingly difficult economic and financial realities. At the national level, the United States is experiencing extraordinary income and wealth inequality (Pew Research Center, 2015; Piketty, 2014; Saez & Zucman, 2014). This means that most of the income and wealth produced is going to the most affluent households (Pew Research Center, 2015), and the majority of US households hold a decreasing share of all income and wealth produced in the economy. Almost half of all income produced in 2014 went to upper-income households (i.e., those earning over $144,251 for a family of 4), an increase from 29% in 1970 (Pew Research Center, 2015). The share of income that went to middle-income households (i.e., those earning between $48,083 to 144, 251) was 43%, down from 62% in 1970 (Pew Research Center, 2015). In fact, family incomes adjusted for inflation have changed little over the past 3 to 4 decades (DeNavas-Walt &

What Factors Predict a Positive Change in a Consumer’s Financial Capability over Time? The New Evidence from Poland

“…On the other hand, our results contradict previous research by Taylor (2011) who suggested that both men and women without formal qualifications (fewer years of formal education) can manage finances more effectively than with formal ones. These studies acknowledged the endogeneity of financial capability and are consistent with the institutionalist conceptualization of financial capability (Banerjee et al, 2017;Birkenmaier et al, 2016;Fu, 2020;Huang et al, 2013Huang et al, , 2015Sherraden & Grinstein-Weiss, 2015;Sherraden & Ansong, 2016).…”

“…The concept of financial capability is a relatively new idea that has developed over the last two decades within consumer finance (Atkinson et al, 2007;Johnson & Sherraden, 2007;Kempson et al, 2005;Sherraden, 2013;Taylor, 2011;Xiao et al, 2014), social work (Birkenmaier et al, 2016;Caplan et al, 2018;Huang et al, 2021;Sherraden & Ansong, 2016) and family studies (Despard et al, 2020;Nam et al, 2015;Serido et al, 2013;Shim et al, 2013). Financial capability describes many, sometimes very different and interrelated concepts, including financial literacy, financial knowledge, financial skills, financial self-efficacy, financial behavior, financial capacity, financial outcomes, financial access, financial resilience, and financial satisfaction.…”

More Than Place-Based: Viewing Geography on a Continuum and the Implications for Social Work Practice

“…An important, though not new, application of this idea can be seen in the financial capabilities and asset building (FCAB) literature. Birkenmaier, Sherraden, Frey, Callahan, and Santiago (2016) note that FCAB efforts work to improve internal capacities (e.g., individual financial management skills) and external conditions (e.g., access to financial institutions). This approach shows the complicated role of place in implementing interventions.…”

Financial capability and financial wellbeing of women in community-based organizations: mediating role of decision-making ability

“…Local communities are the place where these challenging issues originate. The individuals' internal capabilities and external conditions together determine their varying levels of financial capability (Birkenmaier et al. , 2016).…”

“…Local communities are the place where these challenging issues originate. The individuals' internal capabilities and external conditions together determine their varying levels of financial capability (Birkenmaier et al, 2016). In this context, it is worth noting the observations of the Asian Development Bank in their report on gender and development (2003).…”