Meet the SaverLife Science of Savings Challenge Winners

The goal of SaverLife’s first Science of Savings challenge was simple: design a budgeting tool specifically for users with high income volatility. 

Why focus on budgeting and income volatility in the first challenge? SaverLife conducted a research project to determine how income volatility affected Americans and what solutions would create financial stability for households with uneven incomes. The research found that SaverLife members experienced income volatility every three out of four months, and that they covered the loss of income during low months by borrowing money from friends and family, and delaying bill payments. 

Science of Savings is a program designed by SaverLife to create products and tools that will support financial health. With support from JPMorgan Chase, the Science of Savings Challenges will produce a continuous cycle of research, development, and dissemination of new financial tools that help families to save money. 

Paul Riggins, SaverLife Science of Savings Fellow, explained that SaverLife research has found income volatility to be a huge obstacle to people striving to build financial security. 

“Our members are working to save money and make ends meet, but that’s doubly hard when finances are tight and unpredictable,” Paul said. “We wanted to explore what it could look like to build tools that recognize these challenges and help build stability.”

The first challenge brought together a group of diverse participants from the fields of data science, consulting, and research, resulting in several creative solutions to the challenge. 

Lull Mengesha From the Datable Services Team

The first place prize went to the Datable Services team, composed of data scientists Lull Mengesha and Matt Lichti. Lull and Matt work to provide data solutions to organizations and the social impact space and were eager to tackle the challenge of income volatility. 

The Datable Services team built an algorithm that automatically tracks spending behavior on SaverLife members’ accounts. This algorithm would allow SaverLife to provide budget guidance and goals without needing members to manually input their own information. 

As the first place winners, the Datable team’s solution is now being prototyped and tested with SaverLife members. SaverLife will share the results of this tool in increasing savings behavior once more data is collected.

As an immigrant with firsthand experience of poverty, Lull understands the personal toll financial stress takes. 

“The penalty of poverty takes people time and money,” Lull said. “It’s very expensive to be poor. With this project, I felt we could make something really impactful for users dealing with income volatility.” 

The biggest differentiating factor for the Datable Services team is the focus of their budgeting program: instead of tracking the dollar amount spent, like many traditional budgeting programs, their algorithm focuses on frequency of spending. 

Matt explained that the team came up with this idea after analyzing anonymized sample data from SaverLife members. 

“We looked at how individual users spent money at different merchants and in different categories,” Matt said. “That’s how we came up with the idea that reducing frequency of spending would help users save money overall.” 

For people struggling to navigate income volatility, Lull and Matt envision the program helping tighten spending frequency during low income months, and loosening those recommendations during high income months. 

“If we can get people to shift to longer term financial planning, that has other impacts,” Lull explained. “It frees up time and minimizes transaction costs so that you don’t overdraft your account.” 

The second place team, MAD HATT Development, consisted of Bryn Portella, Stephen Phillips, Meryl Nelson-Lee, Rebecca Hatt, and Jessica Hatt. They began designing a web app that would offer users flexibility to customize their budget as their income waxed and waned. While the webapp is still in development, the team’s goal is for the finished product to give users dynamic recommendations based on their personal situations. 

Rebecca Hatt, the leader of the team and analytics consultant at Acumen Solutions, explained that their goal was to create a budgeting tool that allowed users to quickly see an overview of their finances. 

She said, “Our mobile webpage is designed to be used in bite-sized micro moments, while riding the bus to work, taking a coffee break, or in between helping the kids with their homework.”

Most importantly, the app focuses on providing immediate action steps based on its knowledge of the users’ finances. For example, the app might suggest saving a bit extra on a high-income month or give tax-time tips depending on the time of year.  

Why is this important? 

“We hope that this will shift budgeting from being an analysis of the past, to a tool that you can use to quickly take actions that make life better well into the future,” Rebecca said. 

The third place team was Margaret & Perry, composed of two behavioral researchers from the Common Cents Lab, Margaret Bolton and Perry Wright. They developed plans for an app that would help users smooth income volatility by automatically reserving money from high paychecks to cushion bank accounts for low paychecks in the future. 

“The somewhat novel concept that we tried to introduce to the budgeting framework was assigning some funds to two distinct urgent savings uses—income smoothing, to foster resiliency against fluctuating income relative to known recurring expenses, and emergency savings, to foster resiliency against unexpected urgent expenses,” Perry said. 

All of the budgeting tools developed as part of the challenge present innovative ideas that could help people struggling with income volatility to build financial security. 

SaverLife’s Chief Impact Officer, David Derryck, is looking forward to using future Science of Savings challenges to create useful tools that help Americans achieve financial security.   

“We are excited by the submissions we received and we look forward to testing them with our SaverLife community, and seeing what works best for real savers,” he said.