Encouraging Savings by Low-Income Individuals

Personal Finance, Military Families February 07, 2017 Print Friendly and PDF

 

Fry, T., Mihajilo, S., Russell, R. & Brooks, R. (2008). The factors influencing saving in a matched savings program: goals, knowledge of payment instruments and other behavior. Journal of Family and Economic Issues, 29(2), 234-250.

Brief Description: This study investigates the factors that influence the saving behavior of low-income participants in a matched savings program. The factors found to play a positive role in encouraging saving were goal-setting and the financial literacy education component offered in the program. The study also demonstrates that the act of participating in a matched savings program was more important in changing the savings behavior of individuals than that of prior behavior or prior attitudes towards saving.

Implications: Matched savings programs are successful in assisting low-income individuals and households to develop a savings habit. Ideally, programs should incorporate a financial literacy component and encourage participants to set savings goals. Policy makers should continue to offer funding to support matched saving programs to help low-income individuals accumulate savings.

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This work is supported by the USDA National Institute of Food and Agriculture, New Technologies for Ag Extension project.