This document discusses strategies for promoting savings behavior during America Saves Week. It provides data on current savings rates and financial fragility in the US. Research on characteristics of successful savers is presented, such as using savings rules and visualizing long-term goals. Suggestions are made for how to encourage savings, including automatic savings, financial education, matching programs, prize-linked savings accounts, and motivational text messages. The document encourages organizations to participate in America Saves Week activities and outlines available resources.

1. June PuettLindsay FergusonBarb O’Neill
Goals:
 Integrate America Saves Week into Extension Programs
 Savings Behavior Update
Savings: Make It Automatic!

2. Savings Behavior
Research

3. Financial Fragility Data
May 2016 Federal Reserve Board study:
• 46% of adults said they either could not cover an
emergency expense costing $400 or would cover it
by selling something or borrowing something
• 31% of non-retired respondents had no retirement
savings or pension
http://www.federalreserve.gov/2015-report-economic-well-
being-us-households-201605.pdf

4. 2016 EBRI Retirement
Confidence Survey (RCS)
• 69% of workers (or their spouse) had saved for retirement
• Considerable gap between workers’ expectations and retirees’
experience about leaving workforce
• 48% of workers (or spouse) calculated retirement savings need
• 54% of workers had < $25,000 saved (excluding value of home and
DB pension
– Includes 26% who have < $1,000
https://www.ebri.org/pdf/surveys/rcs/2016/EBRI_IB_422.Mar16.RCS.pdf

5. 2016 America Saves Survey
• 2016 survey: 49% of 1,004 respondents save at least 5%
of income
• 43% save automatically outside of work
• 40% report good or excellent progress in “meeting their
savings needs”
• Those with “a savings plan with specific goals” save more
successfully than those without a plan
http://www.americasavesweek.org/less-than-half-of-u-s-households-report-good-
savings-progress-according-to-9th-annual-america-saves-week-survey/

6.  National campaign
 Uses principles of social marketing and behavioral economics to
motive and support low to moderate income households to save
money, reduce debt, and build wealth.
 Consumer Federation of America founded in 1968.
 270+ nonprofit pro-consumer groups

7. • Annual opportunity to promote positive savings behavior.
• Chance for individuals to assess their own saving status.
• Use creative delivery methods (media, classes, events, etc.)
Audiences:
• Internal- Coworkers, students, staff members
• External- Extension clients, community at large, partners

8. America Saves Week 2016 Results
• Reached nearly 34 million individuals
• 384,600 people reached through community events, financial
counseling and workshops, and tax sites
• 40,164 individuals pledged or repledged to save
• More than 2,000 organizations signed up to participate
• 34 America Saves Designation of Savings Excellence Recipients
– 15 banks & 19 credit unions
• 16 states or cities proclaimed a week as America Saves Week

9. Learn More
AmericaSaves.org AmericaSavesWeek.org

11. America Saves Week 2017
1. Sign Up at AmericaSavesWeek.org
2. Plan Activities
3. Download Materials
4. Participate at any level- large or small
BENEFITS:
• Recognition as participating organization
• Emails and reminders from America Saves
• All materials co-brandable

12. Resources for Organizations
• Posters and fliers
• Content for
websites,
newsletters, and
social media
• Press releases
• PowerPoint
presentations

13. Themes:
• Monday: Save Automatically/ Save For Emergencies/ volatile
income
• Tuesday: Family Savings Day
• Wednesday: Save For Retirement – Choose to Save / myRA
• Thursday: Saving at Tax Time/ SYR
• Friday: Debt and savings

14. Embeddable pledge form
I pledge to save
money, reduce debt,
and build wealth over
time.
I will encourage my
family and friends
to do the same.

15. Benefits of the Pledge
• 1st step in commitment to saving
• Simple savings plan
• Goal-based emails
• Savings challenges & eWealth Coach
• Text messages
• Communication opportunities with Savers throughout
the year
Local Campaign Pledge on Website & AmericaSaves.org

16. Motivational Resources
America Saves - Monthly Email
with Tips and Advice
Quarterly E-News with
Information and Stories
Military Saves - Monthly Email
with Tips and Advice

17. Motivational Resources
Goal-based texting tips & reminders encourages continued saving.
Text Examples:
America Saves: With each savings deposit,
you are one step closer to getting out of
debt. Have you made your deposit this
month? Reply YES or NO.
America Saves: Need to pay off debt from
last holiday? Pay off debt with double-digit
interest rates. http://bit.ly/14j3CkX
America Saves: Once a month, use records
to review what you've purchased. Reallocate
some of this spending to emergency savings.

18. • Mini-grants
• Reporting survey –use as a planning tool
• 2017 Digital Kit
• I’m Saving For… contest
• eXtension Financial Challenge
• Webinars
• Video contest

19. National Extension
America Saves Week Programs
Savings Promotion Resource Kit archived at
https://njaes.rutgers.edu/money/savings-promotion-resource-kit/

20. Archived eXtension Webinars
Savings Strategies for Military Families (2/16):
https://learn.extension.org/events/2344
Investing With Small Dollar Amounts (3/15):
https://learn.extension.org/events/1717
Calculating What to save for Retirement (2/15):
https://learn.extension.org/events/1716
Savings Strategies for Non-Savers (2/14):
https://learn.extension.org/events/1426
Saving Money: Research Insights (2/14):
https://learn.extension.org/events/1442

21. Savings Challenges
http://articles.extension.org/pages/73884/monthly-investment-message:-july-2016

22. Tax Time Savings
• Volunteer Income Tax Assistance
• SaveYourRefund.org contest
• Tennessee Saves You Tube video:
https://www.youtube.com/watch?v=5etDEnKColo

23. How can we alter
savings behavior?

24. Characteristics of
Successful Savers
• Grinstead et al. (2011) study of IDA
program participants in American Dream
Demonstration
• About 4 of 5 low-income working
families are “asset poor” with < 3 months
expenses at the federal poverty level to
survive a financial crisis
• Hours of participation in financial
education program, higher matched cap,
prior use of a savings account, and
greater educational attainment were
associated with greater likelihood of
savings and saving goal achievement
http://www.afcpe.org/assets/pdf/vol_22_is
sue_2_grinstead_mauldin_sabia.pdf
Implications
•Learning needs vary. Financial
education should be tailored and
individualized (e.g., financial coaching)
•Peer financial counseling is a low-cost
option to savings coaches
•High match rates and match caps
motivate people to save
•Provide a link between people’s
saving goals and financial education
content

25. Characteristics of
Successful Savers
• Rha et al.(2006) study of the effect
of “self-control mechanisms on
saving behavior: SCF data
– (e.g., saving goals, anticipation of future
expenses, saving rules including saving
regularly or saving one family member’s
income)
• Household saving behavior was
strongly affected by mechanisms
that help people practice self-
control; 56% spent < income
• Households with savings rules
were much more likely to spend <
income than those without rules
http://www.afcpe.org/assets/pdf/vol-1722-self-
control-mechanisms.pdf
Implications
•Behavioral variables affect savings
behavior at all income levels
•Help people establish realistic
personal “savings rules”
•Help people anticipate future
financial planning needs
•Teach financial goal-setting and
provide tools with which to do it

26. Savings Barrier:
Exponential Growth Bias
• “Tendency to linearize exponential
functions when assessing them
intuitively”
–People severely underestimate
how much interest they earn on
savings or pay on credit cards
• Biased people borrow more, save
less, and favor shorter maturities
• Stango, V. and Zinman, J. (2009),
Exponential Growth Bias and
Household Finance. The Journal of
Finance, 64: 2807–2849.
Implications
•Teach The Rule of 72 so people
understand “doubling periods”
•Use hands-on activities to illustrate
the effects of compound interest on
debt and savings
– http://rci.rutgers.edu/~boneill/assignme
nts/sliderule1.html
– http://rci.rutgers.edu/~boneill/assignme
nts/sliderule2.html

27. Savings Resource:
Visualizing the Future
• People need to visualize the future
impact of their savings
• Many people are not good with long-
term decisions
• Hal Hershfield (NYU) et al.: people
save more money after being shown
digitally altered pictures of
themselves at older age
• http://www.marketingpower.com/abo
utama/documents/jmr_forthcoming/in
creasing_saving_behavior.pdf
Implications
•Show people what they could look
like:
– http://faceretirement.merrilledge.com/
– http://in20years.com/
•Show people how much money
they can lose by not saving:
http://rci.rutgers.edu/~boneill/assignments/sli
derule2.html

28. Savings Resource:
Prize Linked Savings (PLS)
• People are more likely to save
when offered the chance to win
cash or prizes
• PLS products more effective at
inducing savings than standard
interest-bearing accounts offering
the same expected return
• Controlled experiment by Filiz-
Ozbay (U of Maryland) et al.:
http://www.nber.org/papers/w19130
http://econweb.umd.edu/~ozbay/savings.pdf
Implications
• Combine features of savings and a
lottery, especially for low-income people
who view lotteries as a form of financial
planning (not necessarily irrational)
• Resources:
http://www.savetowin.org/
http://saveyourrefund.launchrock.com/
http://www.d2dfund.org/
http://blogs.wsj.com/economics/2013/06/21/promis
e-of-prizes-helps-people-save/

29. Savings Resource:
Text Messages
• Karlan et al. (Yale): conducted
experiments with text messages
• Even low-income bank customers
managed to save part of their
income when nudged by regular text
messages
• “Reminders will be more effective
when they increase the salience of
a specific expenditure”
• http://karlan.yale.edu/p/Top-of-Mind-
April2010.pdf
Implications
• Regular “nudges” can motivate
people to save
• Text messages are an effective
motivational tool
• Reinforce the connection between
saving and specific financial goals
• Brain studies: imaging a future goal
is almost as powerful a “zing” as
achieving it (e.g., buying a car)

30. Be Creative! Have Fun!

31. Contact us:
Barbara O’Neil, Rutgers University
oneill@aesop.rutgers.edu
Lindsay Ferguson, America Saves
lferguson@consumerfed.org
June Puett, University of Tennessee Extension
jpuett@utk.edu