Or, why it’s not just about $500.
As a mission-first fintech, SaverLife’s goal is to encourage individual actions that build wealth and to challenge the underlying causes of financial insecurity. If the most personal is also the most universal, we need to dig below the surface to understand experiences, not bank balances.
This year we will be highlighting Savers like Erica, a resilient working mom doing everything right, but struggling to get ahead because of a system that consistently undermines her efforts.
We sat down with Erica to hear about her experiences as a successful Saver who also receives SNAP. Erica had recently used her emergency fund to avert a financial crisis created by the government shutdown. At first glance, one might assume that what saved Erica from missing her rent payment was having $500 in an account. But the bigger success story is that Erica had $500 because she developed a habit of saving that had allowed her to survive prior emergencies and stay on track towards bigger goals.
If we approach this as a $500 problem – a simple matter of money in the bank – we miss the point. Saving is a repeatable action, not just a dollar amount. SaverLife is designed to encourage the practice of saving, and reward not penalize, the use of savings in the event of an emergency.
Focusing on a dollar amount also allows the problem of financial insecurity to be oversimplified. “How do we get more American’s to save $500?” is the easy question. It forces the problem on the individual, and not on the system.
The tough question – and the one we must continue to ask – is why so many people can’t save $500 in the first place. You see, Erica could be earning and saving twice as much right now, but the for-profit college she attended to earn her AA degree is withholding her diploma until she can pay off her debts.
Leigh is the president and CEO of EARN.