The Simple Messaging Tool That Can Help People Save
At SaverLife, we’re always looking for ways to help our members build savings.
We wanted to find a way to help new members jumpstart their saving. Sixty-three percent of people who join SaverLife with less than $100 in savings struggle to get started. How could SaverLife jump start their journey to financial security?
We theorized that if we set a one-month savings goal based on a member’s existing savings balance, it would provide them with a realistic and achievable goal. For example, if member “Sarah” had $75 in her linked account when she joined, we would set a savings goal of $100 for her (see figure below). To test our hypothesis, we ran a two-month experiment where we engaged new members in this type of savings challenge.
Sample Savings Goals
We chose these amounts based on research we published with FINRA finding that those with a savings balance over $100 were 55% less likely to rely on high-cost borrowing and 51% less likely to have their utilities shut off, and a savings balance greater than $250 is correlated with keeping people in their homes. If we can help members reach $100-$250 in savings, they will be better positioned to achieve financial security.
The experiment ran in November and December 2020, an especially difficult time to save because of the holidays and ongoing pandemic. To start, we chose a group of five thousand new members. Roughly half were randomly chosen to receive our new welcome SMS, which challenged each member to reach a certain savings balance within four weeks based on their starting balance. These members received weekly follow-up messages informing them of their progress.
In analyzing the impact of the goal setting and supporting texts, we can say with 90% confidence (90% statistical significance) that receiving the initial invitation text, along with reminders throughout the month, improved the odds that a member would save $100 in a month by 26%.
Our preliminary research shows that providing members with an immediate concrete savings goal based on their starting balance can lead to much higher likelihood of saving. As a result, we will be implementing a welcome SMS program for all new SaverLife members, and testing how to best use goal messaging to build further savings.