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National Federation of
Community DevelopmentCredit Unions. Detroit, May 14, 2014
Jonathan Morduch
New York University
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Research Sample
PRELIMINARY DATA - DO NOT CITE
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• High frequency economic and financial data
– Interviews every 2-4 weeks over a year
• A view into hard-to-see strategies
• Listening to households logic
• Watching what households do
What’s Special About USFD?
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• Around 300,000 cash flows collected during
the year
– About 100 spending categories
– 38 income types
– 69 financial instruments
• 460,000 answers to survey questions
Depth over breadth: Cash flows
6
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A movie, not a snapshot
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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 Castillo
USFD Manager
Timothy Ogden
Managing Director
PRELIMINARY DATA - DO NOT CITE
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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.
PRELIMINARY DATA - DO NOT CITE
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Income Volatility
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Garza Family Income, California
11
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Garza Family Income
13
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Income Variability
NorthernCalifornia
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Income Variability
Brooklyn
NYC
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Income Volatility
0%
10%
20%
30%
40%
50%
60%
Very Steady Somewhat Steady Not Very Steady Not Steady at All
23%
For each income source, how steady is the total weekly
number of hours?
PRELIMINARY DATA - DO NOT CITE
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Multiple Jobs
18
Number of Jobs Held by Each Adult
Over the Course of the StudyNumber of Jobs Held By Each
Adult on Jan 1, 2013
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Income ups and downs
Income
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Spending ups and downs
Expenses
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About 30-40% report…
• My life is not the same from week to week
•
Reluctant to schedule appointments• Hard to keep a schedule
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Big needs, sometimes unexpected
Instability: Life events
Examples % of
Households
Income: Missed an important
source of money coming in that
he/she was counting on
51%
Transportation: Vehicle
maintenance or repair payment
above $100
47%
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Alignment
Income
Expenses
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The great mismatch
Income
Expenses
Hard to budget and save
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• 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 +
• Credit cards: 78% not paid in full each month
• Credit cards: 34% had a card near its maximum
Not Much Slack
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Q: Which of the following is more important to
you?
A. Financial Stability
B. Moving up the income ladder
C. Not sure/Don’t know
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Pew Survey (2011): Sample 2000 Households
Stability vs. Ladder-Climbing
85%
13%3%
Financial stability Moving up the income ladder Not sure/don't know
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USFD (2012): Sample 200 Households
Stability vs. Ladder-Climbing
70%80% 79%
26%16% 20%
3% 4% 2%
Under 101% FPL 101%-201% FPL Above 201% FPL
Financial stability Moving up the income ladder Not sure/don't know
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Savings
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Emergency savings?
Perceived saving need?
Saving Needs
Poverty
Level
Below Federal
Poverty Line
1 – 2 times
the line
> Twice the
lineMedian $0 $150 $300
$3000 $4150 $3200
PRELIMINARY DATA - DO NOT CITE
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How soon will money in account/device be spent?
72%
10% 9% 9%
Within
6 months
6 months
- 1 year
1 year
- 3 years
Longer
than 3
years
P e r c e n
t o f I n s t r u m e n t s
Time Until Most of the Balance will be Spent
Saving Duration
PRELIMINARY DATA - DO NOT CITE
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Balances and Flows
Annual inflow
into
instruments
was around 20-50 times
greater than
the total
balance for
many
households.
PRELIMINARY DATA - DO NOT CITE
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• Low balances, but large flows
• Not much long-term saving
• But much within-year accumulation
Sum
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• Started with poverty and income (1960s)
• Then focus on assets (1990s)
• Needed: cash flows & financial management
Everyone has a system
• What’s often missing:
– Reliability, control, transparency, convenience
Inequality and money