The What: Education and Enhanced Banking services that promote savings
The Why: Empowering, satisfies that "should" feeling
Hypothesis:
Many people want more education/information services than are currently provided by banks, and they wished they saved more.
Interview Questions:
What are
your attitudes/beliefs towards saving money?
How do you
save? By percentage of check? How regularly?
How do you
wish you saved your money?
Have you
heard of Savings sub-accounts?
How would a (nicknamed) savings sub-account help you save your money?
What are
some things you are unclear on regarding how your bank accounts/loans/credit
cards work or can benefit you?
If your
bank offered podcasts or other educational materials on subjects you wish you
knew more about, would you use them?
What types
of educational materials or services do you wish your bank had?
Interview Summaries:
1. Andrew said that he believes that he should use his money in four ways: Sow some (tithe 10%), save some (401K or otherwise), spend some, and share some). He saves a percentage of each paycheck. He makes some sacrifices to save so that he has money for the future in addition to his 401k account. Andrew thinks sub accounts are good for organizing. He has worked in finance, but says he would love to use podcasts or other info media if he didn't know something. He wishes his bank with educate him more on investing options. He uses his banks online mobile app.
2. Kathleen understands what savings accounts are, but doesn't have one and does not save. She thinks that at his point in her life she should already have a retirement plan with a 401k or a savings account that money is automatically deposited in. She didn't know about sub-accounts. When I told her about them, she thought the idea was cool sounding but she is not currently comfortable with or knowledgeable about online banking. She doesn't like using technology in general. She doesn't know what a podcast is and doesn't think she'd ever use extra information available through her bank. She wants to be able to speak to a person immediately when she calls her bank, the system is too automated.
3. Manny thinks saving is important but he is not consistently saving. He only starts saving when he has a specific goal in mind for a big purchase. He thinks he should be putting a small percent of every paycheck away just like he currently has with his 401k is how he should be saving. He thinks having nicknamed subaccounts would help him save because it names specific goals for him to work toward. He likes podcasts so he might use them if he needed to know the specific content. He wishes his bank had a better online app.
4. Chad says saving should be a set amount each time that works toward a larger goal. He said putting extra money into a savings account helps a person not spend it, since it would otherwise just be sitting there [in their checking account]. He puts a random amount of every paycheck into his savings account. He thinks he should have a certain percentage automatically taken from each paycheck so that he can't spend it. He thinks having savings subaccounts would be too complicated. It would tear him between too many options if he saw all his goals written out. He wishes he understood interest rates and fees better because he notices them changing. He says he would be interested in free information, especially by being able to listen and absorb the info. He would also like pamphlets explaining the many types of accounts.
5. Cara has had a savings account since she was 13. She is saving in case of an emergency, but has been saving a higher percentage of her weekly paycheck lately because she is moving soon. Roughly 1/3 of every paycheck goes to her savings account. She wishes she would budget more closely. She knows about sub accounts, but feels more organized with one account. She does have a Christmas savings account, which I had never heard of before. She feels like she knows almost nothing about loans. She wouldn't use the podcasts right now, but later in life she would have time. She loves podcasts. She likes online services like the mobile app and the ability to deposit checks by taking a picture of them.
What I learned: People either don't save at all, save only when certain desires arise, or save consistently. Christmas savings accounts have a doubled interest rate and you can only take out the money without a fee in December. Almost everyone wants to save more or more consistently than they already do. Not everyone wants educational services in the form of a podcast. It would be best to offer all types of informational media, but that would be costly. Having the information available during RELEVANT times in the individuals' lives is most important. It doesn't seem like those who don't save at all (like Kathleen) would start saving just because of education and having more flexibility/ goal orientation with savings accounts. Only those who already save will benefit.
1. Andrew said that he believes that he should use his money in four ways: Sow some (tithe 10%), save some (401K or otherwise), spend some, and share some). He saves a percentage of each paycheck. He makes some sacrifices to save so that he has money for the future in addition to his 401k account. Andrew thinks sub accounts are good for organizing. He has worked in finance, but says he would love to use podcasts or other info media if he didn't know something. He wishes his bank with educate him more on investing options. He uses his banks online mobile app.
2. Kathleen understands what savings accounts are, but doesn't have one and does not save. She thinks that at his point in her life she should already have a retirement plan with a 401k or a savings account that money is automatically deposited in. She didn't know about sub-accounts. When I told her about them, she thought the idea was cool sounding but she is not currently comfortable with or knowledgeable about online banking. She doesn't like using technology in general. She doesn't know what a podcast is and doesn't think she'd ever use extra information available through her bank. She wants to be able to speak to a person immediately when she calls her bank, the system is too automated.
3. Manny thinks saving is important but he is not consistently saving. He only starts saving when he has a specific goal in mind for a big purchase. He thinks he should be putting a small percent of every paycheck away just like he currently has with his 401k is how he should be saving. He thinks having nicknamed subaccounts would help him save because it names specific goals for him to work toward. He likes podcasts so he might use them if he needed to know the specific content. He wishes his bank had a better online app.
4. Chad says saving should be a set amount each time that works toward a larger goal. He said putting extra money into a savings account helps a person not spend it, since it would otherwise just be sitting there [in their checking account]. He puts a random amount of every paycheck into his savings account. He thinks he should have a certain percentage automatically taken from each paycheck so that he can't spend it. He thinks having savings subaccounts would be too complicated. It would tear him between too many options if he saw all his goals written out. He wishes he understood interest rates and fees better because he notices them changing. He says he would be interested in free information, especially by being able to listen and absorb the info. He would also like pamphlets explaining the many types of accounts.
5. Cara has had a savings account since she was 13. She is saving in case of an emergency, but has been saving a higher percentage of her weekly paycheck lately because she is moving soon. Roughly 1/3 of every paycheck goes to her savings account. She wishes she would budget more closely. She knows about sub accounts, but feels more organized with one account. She does have a Christmas savings account, which I had never heard of before. She feels like she knows almost nothing about loans. She wouldn't use the podcasts right now, but later in life she would have time. She loves podcasts. She likes online services like the mobile app and the ability to deposit checks by taking a picture of them.
What I learned: People either don't save at all, save only when certain desires arise, or save consistently. Christmas savings accounts have a doubled interest rate and you can only take out the money without a fee in December. Almost everyone wants to save more or more consistently than they already do. Not everyone wants educational services in the form of a podcast. It would be best to offer all types of informational media, but that would be costly. Having the information available during RELEVANT times in the individuals' lives is most important. It doesn't seem like those who don't save at all (like Kathleen) would start saving just because of education and having more flexibility/ goal orientation with savings accounts. Only those who already save will benefit.
Hey April, I believe you including your hypothesis test on peoples poor savings habits are great, because that can hit most people at home, and make them truly think about financial budgeting. Your interview summarizations are detailed and provide a vivid understanding of your topic at hand. I believe that people dont usually ever save, there are ways to cut your expenses or prevent expenses, but most people do not save.
ReplyDeleteApril:
ReplyDeleteI like your topic. I would agree that people tend not to save or invest because they are not thinking about the future, just right now. I believe that people should start seeking financial advice as soon as they start working. I am curious about a Christmas savings account; I have never heard of that. I guess I need to be continually educating myself on services that are available.
Hey April, I really enjoyed reading your post. I am very passionate about personal finance so It was really great to see you focusing on that as an opportunity. I use an app on my smartphone called Acorns that helps me save towards my future. Your interviews really show how little people think about their future. Most of them seemed very nonchalant.
ReplyDeleteHey April, I think I fit into your hypothesis because I really want to save more but I am not that familiar with podcasts. I know what they are, but I can honestly say I have never listened to one. Maybe I might give one like this a try. Reading your post has pushed me to think about saving more seriously and doing more to save better.
ReplyDelete