If there’s one thing financial experts agree on, it’s the importance of savings. And when it comes to middle-class workers earning hourly wages, they’re not even talking about retirement savings. Experts emphasize the importance of short-term savings for emergencies as being the best way to eliminate financial stress and put people on the path to security.
The problem is that for most people, saving money is just too hard. Wages are down, expenses are up, and everything from debt to our own brains tend to get in our way. This is why we put so much of our resources at Even into building ways for our members to save money. But since we know saving money is so difficult, there’s an important question to answer: Is it working? Are members saving money with Even? The data says yes — and so do the members themselves.
According to Common Cents Lab, “Nearly half of all people living in the United States would not be able to live off their savings for three months at the poverty level.” BlackRock's Emergency Savings Initiative says that having savings is an “important safety net,” and calls it a “building block to better financial health.” Commonwealth says that “building savings is a critical step on the path to financial security,” while The Aspen Institute notes that a “habit of saving regularly” is associated with “better financial health and well-being in the present and in the future.” The Financial Health Network advises that “The ability to save for the future is the foundation of financial health.”
“Success means having that extra money in your account. Anything in there helps."
– Andy, Even member
This broad consensus is no mistake. The people who’ve spent the most time researching, and talked to the most people struggling financially, will all tell you the same thing: The critical first step to long-term financial security is short-term savings. For employers that care about the financial wellness of their workers — not just because workers are asking for help, but also due to the business implications — the logic is easy to follow. To help workers become more secure, help them build short-term savings.
The Federal Reserve has reported that 40% of Americans couldn’t come up with $400 in an emergency. Even member Andy is working towards bucking that trend: “I wanted a small savings account, like a rainy day fund, so if I needed to pay off something I could.” Andy told us that with Even Savings, he’s saved up to $200 over time; money he can then use when things come up. He says that “Success means having that extra money in your account that you didn’t know you had. Anything in there helps.”
“I had to pay car insurance and I was $30 short, so I thought ‘I’ll use my Even savings.’”
– Janet, Even member
Andy’s experience illustrates an important point: People can’t be financially stable if they don’t have money in the bank. Things happen, and if people don’t have a safety net, they turn wherever they can for help. Too often, that means overdrafting their accounts and paying steep penalties, racking up charges on a high-interest credit card, or resorting to predatory payday loans.
Even member Janet encountered a moment when she didn’t have enough money for something important. She told us, “I had to pay car insurance and I was $30 short, so I thought ‘I’ll use my Even savings.’” This is the exact type of situation that can send people into a downward financial spiral. Without the ability to pay her car insurance, Janet may have had to drive uninsured, which puts her at risk legally and financially. Or she could opt to not drive at all — using public transportation, or finding a ride with a friend — which not only makes her life more complicated, but could cause her to be late to work.
“I’ve never saved anything past $100 and now I have over $500!”
– Kiara, Even member
For Janet, saving money with Even is a simple way for her to build up that safety net the experts say is so important. She explains that what works for her is “the fact that it comes out automatically. I don’t have to do anything to it, I can transfer it anytime I need to in an instance when I need the money in my bank account.” Another Even member, Ruby, told us that Even helps her “save and feel more secure, knowing I won’t get stranded anywhere.”
The deck is stacked against most people when it comes to saving money. Between rising costs, overwhelming debt, and unpredictable expenses, it’s difficult for people to find a spare dollar to put away. That doesn’t mean it’s hopeless though, and the proof can be found in stories from Even members who are saving money — sometimes for the very first time. One example is Even member Kiara, who told us her story in May of this year:
“I can save so easily with this app. I just choose to put 10% of my paycheck into a savings account and it's almost like a whole other bank account for me. The money I put to the side, I don't see in my actual bank account and I almost always forget it's there. For someone who will easily spend their savings, this is perfect for me. I've never saved anything past $100 and now I have over $500!”
Part of why Even Savings works so well for our members is due to the psychology behind the way we designed the feature. Behavioral researcher Emory Nelms explains that something called “present bias” can hinder savings efforts; in other words, if people want to spend in the moment, that will take precedence over a goal to save that was established a few days, or even a few hours ago. For Even members, having the money “hidden” — not just separate from their main bank account, but also by using the “hide balance” feature in the app — helps protect their savings and let it grow.
The ability to hide a savings balance is working particularly well for another Even member named Maria. She told us, “I feel very successful. Six weeks, and I have over $130 and it was literally effortless.” She also noted that “I realize that Even Savings is accessible… but it shows you what you have and also shows you your goal. So if I take $100 out, it’s taking a step backwards towards your goal and I’m very goal driven,” and “I feel successful because I can see it grow over time. Every day I don’t transfer is a day I’m winning.”
In January of this year, we announced that our members had put over $21 million into Even Savings. Eight months later, we’re proud to see that our members have saved a total of $82M, and over a hundred thousand people actively using Savings have a total of $17M in their accounts right now.
These numbers are more than just positive indicators of product adoption and usage. They’re signs that what we’re building at Even is having a direct impact on peoples’ financial wellbeing. Tiana, an Even member we spoke to last year, put it well when she said, “I check my Even app every day. It tells me how much farther I got to get to the $500. It’s making me determined.” The people who work for you want financial security — they want to build their savings — they just need the right tools to meet their goals.
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