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The Financial Lives of Working Americans

The Financial Lives of Working Americans. Jonathan Morduch September 29, 2014. Leadership. Principal Investigators. Jonathan Morduch , Professor of Public Policy and Economics , New York University

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The Financial Lives of Working Americans

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  1. The Financial Lives of Working Americans Jonathan Morduch September 29, 2014

  2. Leadership Principal Investigators • Jonathan Morduch, Professor of Public Policy and Economics, New York University • Rachel Schneider, Senior Vice President, Insights and Analytics, Center for Financial Services innovation The US financial diaries were created jointly by the NYU Financial Access Initiative, the Center for Financial Services Innovation, and Bankable Frontier Associates. Timothy Ogden Managing Director Daryl Collins Director Nancy Castillo USFD Manager PRELIMINARY DATA - DO NOT CITE

  3. Sponsorship Leadership support for the project is provided by the Ford Foundation and the Citi Foundation, with additional support and guidance from the Omidyar Network. PRELIMINARY DATA - DO NOT CITE

  4. We have lots of annual data

  5. But life is lived day to day, week to week

  6. US Financial Diaries PRELIMINARY DATA - DO NOT CITE

  7. US Financial Diaries • High frequency economic and financial data • Interviews every 2-4 weeks over a year • A view into hard-to-see strategies

  8. Focus Income Assets Cash flows

  9. Cash

  10. Fed Cash Product Office (April 2014)Diary of Consumer Payment Choice USFD: 50% on average USFD: 40% on average

  11. Cash in Income and Expenditures 80% of cash expenditures are < $50

  12. Why cash matters Cash spending is harder to track and manage

  13. Ups & downswithin the year

  14. Garza Family Income, California

  15. Garza Family Income Turn to pawn shops, costly loans

  16. Income Variability Northern California

  17. Predicting next month Can you predict next month’s income and spending within $500?

  18. Predicting next month

  19. Not Much Slack Spending > income: 97% of households had at least one month with excess spending Overdrafts: 48% had one in the last year (if had checking account); 23% had two +

  20. Not Much Slack Credit cards 78% not paid in full each month 34% had a card near its maximum

  21. Paying the Bills Choosing when to pay bills • Late-paying as common as payday loans

  22. Fundamental tradeoff

  23. Now Soon Later

  24. The quest for control

  25. Q: Which of the following is more important to you? A. Financial Stability B. Moving up the income ladder

  26. Stability vs. Ladder-Climbing Pew Survey (2011): Sample 2000 Households

  27. Stability vs. Ladder-Climbing USFD (2012): Sample 200 Households Poor Near Poor Moderate income

  28. Thank youwww.USfinancialdiaries.org

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