Study: 1 in 3 Houston-area residents making under $100K don’t have $400 for unexpected expenses

HOUSTON – As low cost of living, housing, job opportunities and the nightlife may attract visitors or even new residents to the Houston area -- a new study shows that 1 in 3 residents making less than $100K a year don’t have money for unexpected expenses.

Data collected by Rice University’s Kinder Institute for Urban Research from 2010 to 2023 asked Houston area residents, “Suppose you suddenly had to come up with $400 to deal with an unexpected emergency. How would you handle a situation like that?”

The options provided were: “Do not have the money,” and “Pay with available money.”

The study breaks down a survey conducted with nearly 10,000 residents in Fort Bend, Harris, and Montgomery counties participating.

The study shows that more than one-third of residents in Fort Bend and Montgomery counties and 45% of residents in Harris County said that if they were faced with an unexpected $400 expense, they would not have the money to cover it and would have to borrow the money or not pay for the expense.

Income inequality also played a part in residents’ experiences and perceptions. The differences in perspectives and views of the Houston area by income also determine financial resilience, such as being able to cover an unexpected expense.

In this specific study, about one-quarter of residents make less than $25,000 annually, including 16% of residents from Fort Bend County, 30% of Harris County residents and 16% of Montgomery County residents, according to the study.

Another 23% of residents earn between $25,000 and $49,999.

According to Figure 20, 70% of residents who make less than $25,000 said they do not have the money to cover a $400 unexpected expense, compared to only 13% of residents earning $100,000 or more.

The study shows that economic inequality creates different opportunities and experiences for individuals and their families in the Houston area. It stated that the gap between the rich and the poor results in very different opportunities and outcomes, and if left unaddressed, will perpetuate into the future.