When a car breaks down and there’s no money to fix it, a financial emergency can easily lead to long-term hardship. A family might have to cut back on essential expenses, like food, or increase debt levels. For families, the size of the financial emergency might be small but the effects long-lasting. A D2D of lower income families found that a majority of these households experienced at least one financial shock in the last year, and had no emergency savings to help them.
Innovative products are needed to support people through financial emergencies. Given the diversity of financial emergencies faced, in type and size, and the range of potential impacts, it is important to explore innovations in savings, credit and insurance. D2D is exploring new pathways in traditional financial institutions, prepaid, and the insurance field to create the tools people need to get them through financial emergencies --- and to a better future.
Some projects D2D is currently working on:
Prepaid cards are available and accessible to millions of households in America and have the potential to be a tool for savings innovations. Prepaid cards can especially help consumers build short-term, emergency savings given that they are in the hands of consumers and accessible when emergencies hit and funds are needed. D2D sees the potential of savings as an add-on feature to general reloadable prepaid cards. D2D worked with Banking Up to pilot the "Rainy Day Reserve" savings pocket on their prepaid cards. Read the full report about this project.
Crowdfunded savings is an innovation that could give consumers access broader networks and more funding than they otherwise could reach within their traditional circles; and raise money for aspirational future goals. Read the report of D2D pre-pilot research on this invocation.
Financial Emergencies publications:
- Scaling an "Emergency" Frame and Savings on Prepaid
- Opportunities for Innovation in Crowdfunded-Savings
- Summary of a Ford Foundation Grantee Convening on Emergency Savings and Alternatives, Hosted by D2D
- Paving the Way Forward: Savings On Prepaid Cards
- Emergency Gift Cards: Commoditizing Savings with Prepaid Cards
- A Need for Product Innovation to Help LMI Consumers Manage Financial Emergencies
Financial Emergencies Updates:
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