NEW YORK--(BUSINESS WIRE)--New York University’s Financial Access Initiative (FAI), the Center for Financial Services Innovation (CFSI), and Bankable Frontier Associates (BFA) recently released a series of intimate portraits that reveal the complexity of how Americans are making ends meet. The profiles cover the financial lives of six households from California, Kentucky, Mississippi, and Ohio. They reveal the myriad challenges these families and individuals face, including income volatility, unexpected expenses, and a reliance on friends and family. Detailed data demonstrates the ways Americans view and interact with the financial services industry while illuminating how poverty and finance intersect.
The profiles are part of the U.S. Financial Diaries, a research project following more than 200 low- and moderate-income families over the course of a year. In the study, researchers will collect and analyze detailed cash flow and financial data from households in four regions and 10 distinct demographic profiles. The Financial Diaries methodology, which will be used to conduct this research, has been successfully applied in Bangladesh, India, and South Africa. The results are detailed in the book Portfolios of the Poor: How the World’s Poor Live on $2 a Day (Princeton University Press, 2009). Insights from U.S. Financial Diaries will inform the ability of policymakers, nonprofits, and the financial services industry to understand the basic, daily needs of these households.
“The stories of these households help break down the myth that the financial lives of low-income households are simple. The households often face uncertain incomes that don’t match up well with their expenses. As a response, we see them creating a complex patchwork of tools, products and strategies to make ends meet,” says Jonathan Morduch, Executive Director of the Financial Access Initiative, and Principal Investigator, U.S. Financial Diaries.
“These families, like millions around the country, are piecing together their own suites of financial management tools. They turn to social networks, rely on cash-based systems, and juggle bills and erratic income,” says Rachel Schneider, Senior Vice President, Insights & Analytics, CFSI, and Principal Investigator, U.S. Financial Diaries. “The kind of deep consumer knowledge that is coming out of the Financial Diaries research will let us see where gaps exist in households’ abilities to make ends meet, offering a guide map to the providers, regulators, and advocates working to help consumers take control of their financial lives.”
The U.S. Financial Diaries Project was launched with generous contributions from the Ford Foundation and Citi Foundation. Their continued support and leadership, along with major funding from the Omidyar Network, advances the project’s impact.
The profiles and further information about the U.S. Financial Diaries methodology are available at www.usfinancialdiaries.org. Additional findings will be published in a forthcoming series of reports, which can be received via email by subscribing to the Research Alert online.
The Financial Access Initiative (FAI) is a research center focused on exploring how financial services can better meet the needs and improve the lives of poor households. At FAI, we systematize evidence and communicate lessons, generate new evidence, and frame policy and regulatory issues. FAI is housed at NYU’s Robert F. Wagner Graduate School of Public Service. For more information visit http://www.financialaccess.org and follow us on Twitter @financialaccess.
The Center for Financial Services Innovation (CFSI) is the nation’s leading authority on financial services for underserved consumers. Through insights gained by producing original research; promoting cross-sector collaboration; advising organizations and companies by offering specialized consulting services; shaping public policy; and investing in nonprofit organizations and start-ups, CFSI delivers a deeply interconnected suite of services benefiting underserved consumers. Since 2004, CFSI has worked with leaders and innovators in the business, government and nonprofit sectors to transform the financial services landscape. For more on CFSI, go to www.cfsinnovation.com and join the conversation on Twitter at @CFSInnovation.
BFA is a niche consulting firm based in Boston, focused on a specific purpose – supporting our clients in their efforts to expand financial services to the poor. Our approach is to facilitate strategic thinking about emerging markets and products. We are committed to working in partnership with cutting edge development organizations which include policymakers, regulatory agencies, private foundations, banks and other providers of innovative financial services. For more information, please visit http://www.bankablefrontier.com.