76 million stories, a shared challenge in “getting by”.
Lisa paused, glancing away from my gaze and toward the ceiling. She was a twenty-something grad contemplating a move away from her college alma mater to Los Angeles. And though she continued to playfully twirl the ends of her hair, the lightness had disappeared from her face. I had no idea what she was going to say next, but I could feel its gravity and I knew, for her, it was profound. Lisa sighed deeply, steadying her voice. “So I eat oatmeal for every meal… to help me save money…it’s not really a plan, it’s just being really cheap I guess.”
Eating oatmeal for every meal and piling the rest of the money into savings. That was Lisa’s plan. At some point, the savings would be sufficient to allow her to make the move to L.A. Eat oatmeal. Save. Move. Savings made simple?
The question I had posed to Lisa was about setting and achieving savings goals. Two things have stayed with me: first, the strength of the emotions I imagined Lisa was feeling, something like equal parts deprivation, isolation, and shame. Second, my own disillusionment that anyone, particularly someone who had actually managed to accumulate real and significant savings toward a personal goal, could still feel so lost, alone, and out of control.
There are approximately 6,100 savings institutions in the U.S. These firms employ over 2 million people working in over 90,000 branches and offices. As for their customers, 94% of the U.S. population has a bank account. Additionally, the U.S. has over 166 million credit card holders who have an average of 6 cards each.
Clearly, the banking industry is not one that lacks for investment, or capacity, or reach. And yet, many of those moving into and through the consumer financial system experience it as unhelpful at best and alienating at worst. In fact, I believe the experience of many is much closer to Lisa’s than any of us who have committed our careers to this industry would care to admit. (For more on my personal experiences in the banking industry, see my first blog post: Mission, Meaning, and 200 Near Misses.)
Consider the following statistics from the latest report by the Federal Reserve on the Economic Well-Being of U.S. Households:
- Approximately 76 million adults are either “struggling to get by” or are “just getting by.”
- Forty-six percent of adults say they either could not cover an emergency expense costing $400 or would cover it by selling something or borrowing money (emphasis added).
- 40 percent of those who desired credit say that they faced a real or perceived difficulty in accessing credit.
- Thirty-one percent of non-retired [survey] respondents report that they have no retirement savings or pension at all.
The numbers alone paint a stark picture of the challenges still ahead of us as an industry and a company. But there is an equal, if not greater, challenge that can only be met when we start looking beyond the raw figures to the experiences of how people think and feel about money. Improving both individual financial conditions and this financial experience is our mission at Varo. I believe it will require us to understand consumers at a much deeper level than ever before, be present with much greater information, offer help in more accessible ways, and constantly work to foster healthy financial habits. I am very grateful to Lisa for reminding me of what is at stake if we don’t.
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Image Source: Léa Dubedout