EARN’s research insights shape our programs and services and provide insights into the financial lives of working families As we close out 2018 and begin looking toward 2019, we wanted to look back at what our Savers taught us in 2018.
Savers experience large ups and downs in their income
- Their median monthly income dip is $1,208, while the median income spike is $1,346
- They don’t always experience volatility as dips in income: 55% of income volatility events are actually spikes
Savers are motivated to save, but being consistent can be tough
- They often have to take money out of savings accounts: About 1/3 of transactions in savings accounts is a withdrawal
- The amount they’re able to save is often in flux: it changes by at least 25% in most months
- Savers that stash cash in a dedicated savings account save more frequently than those that save in a checking account
Tax refunds provide much-needed relief, and a great chance to put money away
- On average, Savers had $600 more in their savings accounts three months after receiving tax refunds
- Refunds give Savers a chance to catch up: people receiving refunds spent far more on healthcare, government payments, credit card payments, and utility payments in the month following the receipt of a refund versus those that didn’t receive a refund
- People who took our refund savings pledge were 14% more likely to deposit part of their refund into a savings account
Savers gave us insights into their complete financial pictures
- In July, hundreds of Savers gave us a glimpse into their full financial pictures when EARN rolled out The CFSI Financial Health Score ® Toolkit
- People with higher Financial Health Scores tend to be more successful Savers
- Savers who tend to be less successful at saving report that they’re more likely to struggle with debt
- Higher incomes correlate to higher health scores
Savers are engaging with prize-linked savings
- Savers earned over 23,000 chances to play a Scratch & Save card by saving at least $5 in a given week
- People who played the first Scratch & Save lottery card were 14% more likely to increase their weekly saving frequency
- People who played Scratch & Save saved far more frequently than those that didn’t
- The winning effect is real!! People who won in the first week, when everyone was given a free scratch card, were 100% more likely to save and play again!
Despite challenges, people are still saving
There are now more than 120,000 SaverLife members striving to improve their financial health despite low and unpredictable income. Those who’ve successfully increased their savings have put away over $700 on average in their first six months with SaverLife. They contribute to their savings accounts over 50% of all months during that time.
We’re proud to see these families investing in their futures!
Many thanks to MetLife Foundation for continuing to make the Big Data on Small Savings series possible.
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.