In 10 major US cities, financially insecure families are prevalent, and residents’ financial insecurity affects city budgets. In 2019, the costs to cities range from between $6 and $14 million in Miami to between $534 million and $1,232 million in New York City. In Chicago, the costs range from $68 to $157 million, suggesting that Chicago, like other cities, has an economic interest in improving residents’ financial health.
Analyses of residents’ credit health and debt can provide cities additional information about the financial health of families. Fifty-nine percent of Chicago residents have healthy credit, but the city has geographic disparities in credit health. In some neighborhoods, the median credit score is subprime. Overall, Chicago residents may have comparatively poor financial health. The city’s median credit score is lower than that in other large cities and the national average.
Cities can pursue initiatives that address long standing structural barriers including residential segregation, lack of access to capital flows and affordable housing, and measures that would address predatory financial practices to improve their residents’ financial health. These initiatives can be challenging to implement and require long-term investments and planning. In the meantime, cities can integrate financial coaching, counseling, credit building, and incentivized savings interventions into existing government programs into improve residents’ financial well-being and help the city meet residents where they are.