What does saving mean to you?
At SaverLife, we talk a lot about how important it is to save. But defining what it means to save is surprisingly difficult!
Consider this scenario: You transfer $5 from your checking to savings account every week all year. At the end of the year, your car needs some repairs. You withdraw all the money you’ve saved to pay for car repairs. It’s a necessary expense, but it’s still depleted your savings. Have you saved this year?
There is no right answer to this. Some people say yes, this is saving because you had the habit of saving money. But other people say no, this is not saving because the balance in your savings account is the same as it was a year ago.
It comes down to this: Is saving a behavior or a balance?
Saving for Soon
Earlier this year, we ran a campaign called Savers Win, where SaverLife members pledged to save their tax refunds and won prizes. If you participated in Savers Win, you may have answered a survey from us about whether you actually did save your refund.
When we looked at at your answers, we noticed that people were describing the same behavior in different ways. For example, one Saver told us that she saved her tax refund to pay for an updated glasses prescription. Another Saver told us that she ended up not being able to save her refund – because she bought new glasses!
If you’re trying to start saving, how do you define saving? How do you know whether you’ve been successful at saving this month – your savings balance or the behavior of saving regularly?
Julia is part of EARN’s Research and Innovation Team. If you join SaverLife, you may get emails from Julia asking you to help with our research. These are always optional (and you can unsubscribe at any time), but your voice helps us improve SaverLife and understand how we can better serve our members.