Financial Health Leaders Lab: Boost Savings with Challenges and Empowering Messages
Conducted in partnership with the Financial Health Network’s Leaders Lab, this study examines the impact of our savings competition with prize-linked savings, motivational text messaging, and peer comparisons.
We tested the impact of several approaches to a new savings competition called the “Race to $500”. These approaches built upon previous research by incorporating prize-linked savings, motivational text messages, and peer comparison. We anticipated this new competition would increase the number of members who chose to save, increase the amounts they saved, and lead to higher savings balances.
What is the Race to $500?
The Race to $500 rewarded members for making progress toward a $500 savings goal from the end of September 2019 until the end of November 2019. Members who participated in the race by opting in from an email invitation became eligible for larger prizes as they saved more. A member who increased their savings balances above thresholds of $100, $250, or $500 during the race became eligible to win a prize of the same amount.
Testing Motivational Text Messages with Tone Variances
We paired the Race to $500 with a text messaging campaign that reminded members about the competition and encouraged them to save. We texted members once per week during the nine weeks of the Race to $500, with motivational messages that used varying tones. Reminders about a goal, such as regular savings, are helpful for increasing the salience of the goal and mitigating the effects of limited attention.
Sample Messaging:
Peer Comparison: The Savings Leaderboard
We also developed a Savings Leaderboard to accompany the Race to $500, a dashboard that displayed savings deposits that SaverLife members made. Weekly text messages encouraged members to check out how their savings deposits stacked up against the savings of other SaverLife members participating in the Race. Members could view the most recent and largest savings deposits made during the Race to $500, with a filter to display savers in their state and metro area.
Key Findings
Having Access to the Race and Empowering Messaging Caused Higher Savings Deposits After 6 Months
The savings competition increased the number of people who saved during the competition by 6% and increased average savings deposits by 31%, or $451, over six months.
The average deposits per member into savings, six months after the start of the Race to $500
Empowering Messaging Increased Net Savings Balances After 6 Months
Motivational text messages that used an empowering tone increased savings deposits by 53% and increased savings balances by an additional $950 over six months, or a 7.7 times greater increase.
The average net change in savings balances six months after the start of the Race to $500
Peer Comparison: The Savings Leaderboard
Providing peer comparison information did not influence savings behavior during the time period of this study, but could create a positive impact over a longer timeframe.
