Stay Informed!

By Sean Luechtefeld on 03/12/2010 @ 03:30 PM

Tags: Innovation, Innovators, Behavioral Economics

Certainly, one of the biggest challenges we face in the Assets field is finding innovative approaches to encourage saving in a way that isn't burdensome for the saver. The New America Foundation has been working with Innovator-in-Residence Mindy Hernandez. Mindy and Alejandra Lopez-Fernandini sat down together to discuss AutoSave.

Mindy and Alejandra's conversation details how AutoSave works. To read the full article, check out Applying Behavioral Sciences in the Real World.

According to Alejandra, AutoSave is “a low cost, potentially scale-able model for increasing personal savings.” Employees who sign up for direct deposit through their employer and opt in to AutoSave system automatically see a portion of their paychecks diverted into a savings account. For most sites, the recommended amount is $25, so employees paid on a bi-weekly schedule save about $50 per month. What is really exciting is that most individuals who enrolled in the program chose to maintain that amount, rather than save a smaller amount. In some cases, people saved up to 25% of their paychecks! Perhaps even more promising: users who traditionally did not save portions of their paychecks did so for reasons that the AutoSave system allowed them to overcome.

There are many more exciting findings associated with this program and I’ll be checking back to see how AutoSave continues to grow.

Do you have a burning question you'd like to ask a behavioral scientist? Click here to submit your question today!

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