What we do is work with financial service providers to create better products, services, and processes that leverage a greater understanding of human behavior for better financial outcomes.”
Making small savings go far
The Lab focuses on five core areas: increasing earnings, managing cash flow, decreasing expenses, managing debt, and increasing long- and short-term savings. In 2018, the Lab worked on nine short-term savings projects and 10 long-term savings projects. “We think about short-term savings as a safety net for cash emergencies, and long-term savings as more about retirement or a child’s savings account,” explains Mariel.
One key partner in the savings area has been the Latino Community Credit Union. “We helped the Latino Community Credit Union members to easily and painlessly build regular, small savings,” says Mariel. “When members set up their automatic repayment, we proposed that they round-up their payment and the Credit Union would save the difference for them. So instead of a payment of $138, they would instead round up each payment to $150. It was painless savings because people don’t tend to think about precise numbers in their budget; they were naturally already thinking of it as an even figure. By rounding up that figure, people were able to save a small amount without feeling constricted in their budget."