Asset accumulation is especially challenging for low- and moderate-income households, which often face fixed costs in their budgets that limit their ability to save. Key fixed costs include expenses associated with housing, such as rent, mortgage, taxes, and utilities. In 2011, 64% of households making $15,000-29,999 were cost-burdened (spent 30% or more of their income on housing). Data were collected in 2007 at two sites using a mixed-methods approach. A sample of 175 households were examined to determine how certain low- and moderate-income households with varying levels of cost burden managed to build savings and why others struggled with the same goal. Households with savings above the sample median of $112 saved an average of $2,304 (with a median of $803). Households with savings below the group's median had an average of $13 in savings, with a median of zero. Barriers to saving experienced by our asset-challenged households include unpredicted shocks, low incomes, unemployment and chronic sickness, large debt, multiple dependents, and prioritizing human capital investments and consumption over saving. Pathways to savings include coresidence, sharing business profits based on need, and financial assistance without obligation of repayment. Other pathways include financial literacy about budgets, savings, and other investments.

Original languageEnglish (US)
Pages (from-to)387-414
Number of pages28
JournalHousing Policy Debate
Issue number2
StatePublished - Apr 2014


  • asset accumulation
  • housing cost burden
  • saving

ASJC Scopus subject areas

  • Development
  • Urban Studies
  • Management, Monitoring, Policy and Law


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