Spotlight On: Liquid Assets, Financial Shocks, and Entrances into Material Hardship

This report uses Poverty Tracker data to examine whether liquid assets guard New Yorkers from sliding into hardship after experiencing a financial shock. The findings show that roughly $2,000 in liquid assets appear to buffer against added hardships after such a shock, but not all New Yorkers have access to such financial reserves.

Key Findings

• Working-age New Yorkers who experience a financial shock face an elevated risk of entering material hardship.

• The likelihood of falling into hardship after experiencing a financial shock is highest for working-age New Yorkers without any liquid assets.

• The risk of entering hardship falls as liquid assets rise: working-age New Yorkers with $2,000 in assets are significantly less likely to fall into hardship after experiencing a shock than those with $0 in liquid assets.

• When assets rise above the $2,000 level, the risk of falling into hardship after a shock levels off and is roughly the same when comparing those with $2,000 and $3,000 in liquid assets.

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Suggested Citation:

Maury, Matthew, Sophie Collyer, Benjamin Glasner, Yajun Jia, Christopher Wimer, and Christopher Yera. August 2023. “Spotlight on: Liquid Assets, Financial Shocks, and Entrances into Material Hardship.” Robin Hood.