www. usfinancialdiaries.org | ©, 2011 the financial lives of working americans jonathan morduch...

www. USfinancialdiaries.org | ©, 2011

The Financial Lives of Working Americans

Jonathan MorduchSeptember 29, 2014


PRELIMINARY DATA - DO NOT CITE

Leadership

• Jonathan Morduch, Professor of Public Policy and Economics, New York University

• Rachel Schneider, Senior Vice President, Insights and Analytics, Center for Financial Services innovation

Principal Investigators

The US financial diaries were created jointly by the NYU Financial Access Initiative, the Center for Financial Services Innovation, and Bankable Frontier Associates.

Daryl Collins Director

Nancy CastilloUSFD Manager

Timothy Ogden Managing Director



Sponsorship

Leadership support for the project is provided by the Ford Foundation and the Citi Foundation, with additional support

and guidance from the Omidyar Network.


We have lots of annual data


But life is lived day to day, week to week



US Financial Diaries


• High frequency economic and financial data

– Interviews every 2-4 weeks over a year

• A view into hard-to-see strategies

US Financial Diaries


Focus

Income Assets Cash flows


Cash


Fed Cash Product Office (April 2014)Diary of Consumer Payment Choice

USFD: 40% on average

USFD: 50% on average


Cash in Income and Expenditures

80% of cash expenditures are < $50


Cash spending is harder to track and

manage

Why cash matters


Ups & downswithin the year


Garza Family Income, California

16


17

Turn to pawn shops, costly loans

Garza Family Income


Income Variability

Northern California


Predicting next month

19

Can you predict next month’s income and spending within $500?


Poor Near Poor Low Income0%

10%

20%

30%

40%

50%

60%

70%

80%

% Households that can’t predict next month’s spending within $500

Poor Near Poor Low Income0%

10%

20%

30%

40%

50%

60%

70%

80%

% Households that can’t predict next month’s income within $500

20

Predicting next month


Spending > income: 97% of households had at least one month with excess spending

Overdrafts: 48% had one in the last year (if had checking account); 23% had two +

Not Much Slack


Credit cards

78% not paid in full each month

34% had a card near its maximum

Not Much Slack


Paying the Bills

Choosing when to pay bills• Late-paying as common as payday loans

One or more weeks early

Less than 1 week early

On time Less than 1 week late

One or more weeks late

14%

26%36%

15%9%

Q: When were bills paid?


Fundamental tradeoff


Now LaterSoon


The quest for control


Q: Which of the following is more important to you?

A. Financial StabilityB. Moving up the income ladder


Pew Survey (2011): Sample 2000 Households

Stability vs. Ladder-Climbing

Series1

85%

13%3%

Financial stability Moving up the income ladder Not sure/don't know


USFD (2012): Sample 200 Households

Stability vs. Ladder-Climbing

Under 101% FPL 101%-201% FPL Above 201% FPL

70%80% 79%

26%16% 20%

3% 4% 2%

Financial stability Moving up the income ladder Not sure/don't know

Poor Near Poor

Moderate income


Thank you

www.USfinancialdiaries.org

www. usfinancialdiaries.org | ©, 2011 the financial lives of working americans jonathan morduch...

Documents

financial instruments

financial literacy

financial data interviews

cash spending

cash expenditures

california16 www

average www

directorpreliminary