Behavior Changes and Prize-Linked Savings: Managing Financial Volatility

Behavior Changes and Prize-Linked Savings: Managing Financial Volatility

Consumers from across the income spectrum are faced with the challenge of uncertain income and expenses, but for low- and moderate-income consumers with limited access to financial products and services these challenges are magnified. Commonwealth undertook a year-long study with eight Greensboro Municipal Credit Union consumers in North Carolina, meeting with these individuals to gain a deeper understanding of their financial lives. Through in-depth interviews and surveys, Commonwealth compiled a rich trove of information and insights related to a number of different aspects of consumer's financial lives that are described in this paper. This report focuses on three of the study's participants and their unique experiences with financial volatility.

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Key Takeaway

Prize-Linked Savings offers a valuable solution for making a savings buffer easier to achieve, which is crucial for households with high financial volatility.

Key Learnings

  • Consumers may have the desire to begin a savings habit, but are held back by a feeling that it is either too difficult or out of reach.

  • Individuals who actively used Save to Win accounts experienced positive changes in their ability to manage financial volatility.

Key Findings

  • Besides being a vehicle for storing money, a savings account should also be fun and engaging to encourage use and bring excitement to an otherwise difficult activity.

  • Products with a low barrier to entry provide a better experience for a wider range of consumers.


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