When the government shutdown hit in early January, SaverLife Saver Erica from Augusta, Georgia, learned she would only receive $40 to help pay for the apartment she lives in with her two sons, Ethan, age four, and Dimitri, almost two. This was a 90% reduction from the $400 per month she usually receives, increasing her monthly rent obligation from $194 to $554.
Fortunately, with SaverLife’s help, Erica had an emergency fund to help fill the gap.
“Since everything has been delayed and on hold, I just had to substitute,” she said, adding that she’s eager to rebuild that cushion. “That is why I’m trying to work a little bit extra so I can put it back. But I had to take so much out to help make up that cost.”
Erica is one of over 10,000 Americans receiving benefits through the Supplemental Nutrition Assistance Program (SNAP) who are building savings while earning prizes and rewards with SaverLife. Our SNAP Savers connected with SaverLife through a partnership with FreshEBT. Of those 10,000 people, one in three have increased their savings – and they’ve done so by an average of $490 in just first six months with SaverLife.
After six months, SNAP recipients who joined SaverLife report that:
- they’re much more likely to save at least monthly
- they’re more likely to have at least three months of expenses saved
- they’re more likely to be spending less than their income¹
Erica has a similar story. Before SaverLife, she tried to save between $20 and $30 per paycheck for “a rainy day,” but she struggled to meet her goal consistently. When she found SaverLife, she was eager to give it a try: “I could earn more money for actually saving. I thought that was a pretty cool idea.”
Both Erica’s saving frequency and savings balance increased after joining SaverLife. “My savings became more consistent, and I was saving a little bit more. The $20-30 went to $50 per paycheck.”
The government shutdown isn’t the only recent example of Erica dipping into her savings account. Last fall, during a routine checkup for her younger son Dimitri, the doctor discovered an issue requiring immediate surgery.
“We found it and it was totally out of the blue,” she recalls. “I never expected it to happen, but it did. I was going back and forth for a couple days to the hospital. It was awful.”
Although many of Dimitri’s expenses were covered while he was hospitalized, Erica’s income fell. “I dipped into my savings because I had to take time off of work, and I didn’t have any family medical leave to support it. So I had to take absences without pay. I had to use funding from my savings to help with the cost of food for me and my other son while I was there.”
Erica was able to build that savings cushion and take care of her two children while earning $10 an hour as a customer service representative. But she has her sights set higher. Last year, she finished all of the required courses to receive an associate’s degree in science and business management. She wants to use this degree to become a pharmaceutical technician, where she expects her wages to jump to $15 per hour.
But there’s a catch. Even though she graduated last May, Erica hasn’t received her degree because she hasn’t finished paying her tuition. And because she hasn’t received her official degree, she hasn’t been able to get that higher paying job.
“The college took away the single-parent scholarship, so I lost an extra $500 per semester. I had to make it up some other way; so I’ve had to juggle around with bills to pay full tuition while taking care of the kids as well.”
Erica has a lot in common with the many SaverLife members who receive SNAP benefits, of which:
- 85% are women
- 68% are single with dependents, 16% are single with no dependents
- 60% are minorities
- 73% are under 40, 35% are under 30
- 91% don’t have an associate’s degree or higher
- Self-reported average income is $11,289
Erica’s story puts a personal face on an Urban Institute study that found that just a few hundred dollars in savings can make a huge difference.² Savings help families avoid eviction, keep utilities accounts current, and stave off hardships after job loss, health issues, or large income drops. She’s proof that anyone, regardless of their income, can build a habit of saving money, and that even a little bit saved can go a long way.
Despite the obstacles that continue to come her way, Erica continues to save. She’s now saving $75 per paycheck, or $150 per month, because she knows how important those funds will be when she needs them.
For more big data on small savings, check out EARN’s insights page.
¹Based on any saver who redeemed rewards after six months
As EARN’s Director of Research, Tim is responsible for measuring the impact of SaverLife, testing new ways to encourage saving, and delivering insights that advance knowledge and tactics around financial inclusion and financial health.