“Something most people don’t understand,” says Carolyn Doyle, SaverLife user, “is that it’s terribly expensive to be poor. In our society, it feels like people who have wealth are rewarded and the poor are punished. SaverLife is doing something to fix that.”
Developed by EARN, a fintech focused on improving the financial health of working families, SaverLife helps Carolyn and thousands of others across America put a little money aside each month to prepare for life’s unexpected costs. By incentivizing people to regularly save a small amount of money, SaverLife sees people take their savings accounts from empty to a small cushion to protect them from car breakdown costs, medical expenses or overdue electricity bills.
Research from the Federal Reserve Bank found that more than 40% of Americans can’t cover a $400 emergency expense without going into debt. And when financial emergencies happen, $400 can be the difference between keeping your car on the road and not being able to get to work.
On a mission to empower people
EARN, the nonprofit parent company of SaverLife, launched in 2001 as an organization to support savings in lower-income families. “Our mission is to empower people on lower incomes and help them to save money,” explains Shana Beal, EARN’s Director of Communications. “We’re fortunate to have ongoing support from MetLife Foundation as one of the founding funders of SaverLife. We set up the SaverLife platform in 2017 and so far we have 150,000 members using it.”
So how does it work?
On sign-up, new savers link their existing savings or checking account with SaverLife, which then enables the platform to see money going into their accounts. Savers can access saving tips and tricks, set their goals, make saving pledges and even receive digital financial content developed by a certified financial coach.
“SaverLife is dynamic and it’s always changing based on feedback from our savers,” says Shana. “We offer a lot of ‘incentivized savings’ – this includes prizes and cash rewards for people who manage to hit their savings goals. This type of prize-linked saving is really successful – and our data proves that. It helps people to think about how much they’re saving – especially if there’s a chance to win prizes.” Research shows that people who play the lottery spend about $514 per year – regardless of their socioeconomic status. SaverLife has helped to channel some of the excitement around winning into positive reinforcement for creating a savings habit.
EARN teamed up with Commonwealth, another innovative nonprofit and MetLife Foundation partner, to launch Scratch & Save for SaverLife users. For each week that members save at least $5, they receive a digital scratch card with the chance to win $5 or more. Just like a physical scratch card, savers scratch away the front of the card – but on a screen with their finger, not with a coin – to reveal if they have won a prize. At the launch, each member got a free scratch card, and the results showed that the people who took a chance on the original card were 14% more likely to save in any given week than those who didn’t play the original card. In fact, people who saved and scratched a card were 30% more likely to save again the following week compared to those who didn’t.
“Saving money is about creating a discipline — a new routine in my life.” – Carolyn Doyle, saver
A life-changing routine
“It’s not about how much I’ve saved or what I’ve been able to pay for,” explains Carolyn. “For me, it’s about the journey, not the destination. Saving money is about creating a discipline — a new routine in my life. I’ve always chosen to work for nonprofits so money has always been tight, and I have kids with special needs so I would like to not worry about money. SaverLife has helped me save and I don’t get discouraged if I’m only saving $5 – that’s $5 more than I would have saved otherwise.”
Savers’ habits haven’t gone unnoticed by the SaverLife team. Over the last year alone, members have saved a staggering $24 million. “It’s incredible,” Shana says. “As soon as people realize they can get prizes and rewards for putting money into their own accounts, they create that habit of saving. It can be hard to get started saving, but this really helps people. Our savers say that they carry on saving their money because it gives them a real confidence boost.”