Commonwealth’s work to use prizes to motivate saving has led to $185 million being saved, mostly by financially vulnerable people, in the last 8 years. The chance to win a prize has proven time and time again to be an effective motivator for people to save, allowing them to begin to build financial security.
SaveYourRefund prize winners Ivonne Sonato-Vega and Ebony Brown-Parks, along with thousands of others, were inspired by their families and motivated by prizes to save at tax time. Ivonne said, “Because two of my three children were preemies, it inspired me to be the first in my family to go to college and study to be a NICU nurse. I'm saving for nursing school and a deposit for a mobile home." Ebony explained that for her, “Saving money is about security, it’s about preparation for my future, and about providing a solid foundation for my children’s future."
Prize-Linked Savings (PLS) not only inspires saving, but is also a catalyst for other positive changes in financial behaviors. Commonwealth's research with credit union members found that PLS accounts can be anchors of stability, fostering choices and actions that promote financial security and diminish the feeling of vulnerability. They have helped people become more mindful about the way they manage their finances, and have encouraged expanded use of a range of financial products and services.
We’ve collaborated with partners across sectors to increase the impact of PLS whether at tax time, at financial institutions, in retail outlets with prepaid cards, through employers, or in FinTech. The impact numbers speak for themselves:
- $175 million saved since 2009 in 75,000 Prize-Linked Savings accounts at 153 credit unions in 12 states, with Missouri and Kansas joining in July 2017.
- Almost $10 million saved at tax time through SaveYourRefund by nearly 12,000 tax filers since 2012, including $2.4 million in 2017 alone, in partnership with non-profits like America Saves and hundreds of VITA sites.
- 130% increase in users of the savings pocket and a 38% increase in average savings with Prize Savings on the Walmart Prepaid MoneyCard, as reported in The Atlantic and Forbes.
The impact is clear and the possibilities are endless. We’re just beginning to understand the potential of prizes to motivate positive financial behaviors. We’re looking forward to exploring how prize-based innovations can be applied in new ways – at banks, on payroll cards, with employers, with government securities like U.S. Savings Bonds, in the FinTech industry. Start a conversation today about how you think prizes can build the financial security and opportunity of financially vulnerable people.