With the second full year of Common Cents Lab in the books (in this book, to be more precise), there is much progress to acknowledge. While Common Cents Lab is a research entity, its work does so much more than create interesting research. It creates easier, more intuitive ways for people to save – which is something that most people say they want to do, but find difficult.
In 2017, twenty-seven organizations worked with Common Cents Lab to design products or outreach strategies that have helped nearly 500,000 low- and moderate-income Americans thus far. The organizations’ projects are varied. Some helped people save in the most traditional sense; others surfaced ways for individuals to decrease their debt and expenses. In the experiments conducted thus far, more than $10.5 million went into the pockets of real people. While often in increments of $20 at a time, this savings total is a starting point to financial security for more people.
At MetLife Foundation, we believe in the power of understanding human behavior and designing products, services and interventions that help people spend less and save more – in a way that’s profitable for providers at the same time. That’s why we support Common Cents Lab. We think these experiments are just the beginning – as each partner organization continues to apply what it’s learned about human behavior, there will be more ways for low-income people to continually improve their financial health.
Talking to one of the Common Cents cohort members recently, I was told, “I got funding and great fintech knowledge from an accelerator program; but I got growth and scale by understanding customers – and that was from working with Common Cents.” It was such a great reminder that all of us working in the financial health space (whether you call it financial inclusion, asset building or something else) are dependent on each other to succeed in our shared goal: helping real people achieve their aspirations by creating and delivering financial services and tools that make “managing your money” less time consuming and easier.
MetLife Foundation supports financial inclusion and financial health in more than 40 countries, working with more than 150 partners. In addition to our grantee partners, we’ve also heard from many not-for-profits, credit unions, regional banks, tech entrepreneurs, academics, students and others that they have found this annual report to be a useful tool. We encourage you to read the report, share it, and do something to make good financial decisions feel like common sense for more people in the U.S. and abroad.
In 2017, the S&P 500 reached historic peaks, the unemployment rate hit a low of just 4.1%, the poverty rate decreased to 12.7%, and median household income has risen by 3.2%. Yet, these positive macroeconomic trends accompany widening income and wealth inequality, where large swaths of the population are being left behind.
The personal savings rate for the bottom 90% of households in the United States is 0%, credit card debt has reached more than $1 trillion for the first time since the Great Recession, an estimated 40% of people 5-10 years from retirement have no money saved, and 1 in 3 Americans have debt that is currently in collection.
To quote Charles Dickens, “It was the best of times, it was the worst of times.”
90% of households in the U.S. have a 0% personal savings rate