The importance of a financial cushion
For many households across the country, having savings means having room to breathe. That’s because a financial cushion can change the trajectory of a household. Studies have shown that having at least $2,000 in emergency savings is associated with a 21% higher level of financial well-being than not having one. Even modest liquid savings can create breathing room when a car breaks down, work hours are cut, or a medical bill arrives. Yet the households that can benefit most from that cushion often have the least room in their budgets to build one.
When members come to SaverLife, they are balancing act experts, juggling bills, managing debt, and facing competing financial priorities. What we’ve learned from conversations with them is that having savings and seeing the balance in their accounts “makes them feel proud” and gives them a buffer to absorb financial shocks. Whether they’re striving for homeownership, planning for retirement, saving for a rainy day, or putting money aside for their children’s college education, it all comes down to helping them feel less stressed about the future and what it may bring.
In times of anxiety and uncertainty
The idea of savings as a safety net doesn’t come as a surprise, as we have seen throughout our work that one of the biggest challenges our members face when simultaneously tackling financial challenges and improving their financial health is the heightened emotional stress and decision-making involved in constantly managing multiple financial priorities. For members like José, having savings means not living under constant financial pressure, not second-guessing everything he does, and not feeling guilty about spending money on himself while making progress toward his financial stability and long-term savings goals.
When members, like Colleen, discuss living a life defined by constant change, she also mentions the persistent anxiety that shows up in her day-to-day life, and how having savings eases her mind and gives her the confidence to feel secure as she navigates an uncertain world and plans for her future. As someone who participates in SaverLife’s savings challenges, she finds that the positive reinforcement she receives not only reminds her that she is on the right path to saving toward her goals but also eases her stress. For her, emotional and financial health are closely connected.
In unexpected times of need
Colleen’s not alone in identifying a financial cushion as a main part of feeling emotionally secure. Linda, a member from upstate New York who shares a home with her active-duty military husband and their two young daughters, explains that having a financial cushion helps her feel prepared for uncertainty and less worried. After experiencing an unexpected loss, her savings and the money she won from SaverLife’s Save Your Refund challenge gave her the resources and peace of mind to respond to the crisis.
Following the sudden change in Linda’s life, her approach to building savings morphed from preparing only for emergencies to striking a balance that also gives her the freedom of not having to worry about every dollar she spends. Now, when she saves, she measures success by how she feels as the dollar amount in her account increases.
A safety net for future generations
Having savings isn’t just linked to the relief of being able to cover everyday expenses and unforeseen expenses. It is also about saving for future generations and feeling at ease knowing that, at least, their children have a financial safety net they can rely on if needed. When parents Minh and Emily shared how they approach saving for their children’s future, they see it as connected to their own mental and financial well-being. If they can give the next generation a head start by saving today, they hope it will at least help mitigate the mental and emotional burdens that financial pressures may cause, and they will have something to fall back on.
The experiences of our members highlight that savings provide not just financial stability, but also peace of mind and hope for the future. By supporting families as they build their own safety nets, SaverLife helps foster both financial and emotional well-being, empowering individuals today and for generations to come.
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