Nearly half of all Americans have less than $500 in the bank. Stagnating wages, job cuts, and lack of opportunity can make it seem impossible for working families to build a buffer against financial emergencies.
This is why Opportunity Fund created Start2Save—to help the most vulnerable families build a rainy day fund and the savings habit to keep it replenished. Launched in 2011, our Start2Save pilot set out to demonstrate that very low-income families could get on the path to financial stability and security by building emergency savings.
We are excited to share the full results from the Start2Save pilot in this new report, the second in our Reporting on Impact series, which includes research findings, best practices, and lessons learned. Our evaluation revealed modest but meaningful changes in participants’ behavior and attitudes.
Key findings include:
- Savers show a significant shift toward a longer time horizon when thinking about money. 41% of graduates think about the next year or beyond when managing their money, compared to just 21% of participants at intake.
- Start2Save produces an increased propensity to save. 87% of graduates reported they would save, rather than spend, an unexpected windfall, compared to 66% of participants at enrollment.
- Graduates are reluctant to spend savings. One of our strongest findings was that participants are reluctant to use their Start2Save funds because of the sense of security they provide.
Regina was one of Opportunity Fund’s first Start2Savers. As a single mother working and going to school, she often fell short on bills and didn’t believe she had enough money to save anything. Through Start2Save, Regina learned to create a budget and set goals for the future, and she began setting aside $42 each month. Within a year, she had reached her $500 goal and received $1,000 in matching funds. Today, Regina feels a sense of control over her finances and her future. She plans her spending each month and feels prepared — both financially and emotionally — to confront the unexpected. “I feel very confident financially,” Regina says. “Before, I was thinking about it, but I was not doing anything about it. Now, I can plan for the short term and the long term.”
Opportunity Fund is driven by the idea that small amounts of money and the right financial advice can help close the opportunity gap for people like Regina. As a leading microfinance provider, we have a strong history of developing innovative products and services to meet the unique needs of those we serve. We are committed to excellence in evaluation, measuring the impact of our work and leveraging what we learn to improve our programs and better serve our clients. We do this by partnering with third-party researchers who employ rigorous methods to measure the financial and behavioral outcomes of our work.
Through our Reporting on Impact series, Opportunity Fund documents and disseminates findings from our evaluation work to a broad community of stakeholders. Our goal is to promote discussion and advance advocacy and innovation in the microfinance and asset-building fields.
We hope you find this report informative and, as always, we welcome your questions and input about our work.