WASHINGTON– America Saves, an initiative of Consumer Federation of America, has launched “Foundation $500,” which it is describing as a groundbreaking research initiative examining the effects of the cash infusions on saving, spending, and mental health with low-wage earning adults.
America Saves said it is engaging in the pioneering research in partnership with Even, a leading financial benefits platform focused on financial resiliency. More than 4,000 participants will receive $500 via the Even app with the option to access the funds immediately or save them.
According to America Saves, the research will be used to inform future projects and programs to better compensate low wage earners to help them build financial resiliency.
“Our vision is that every American has $500 in savings to cushion them from financial shocks,” said Kia McCallister-Young, newly appointed co-director of America Saves. “And this is the perfect way to start our next 20 years: by jump-starting hard-working adults’ accounts.”
One of Three Initiatives
The Foundation $500 initiative was one of three initiatives announced during the CFA’s virtual 20th anniversary celebration, all of which the organization said are intended to bring one of America Saves’ core values, “that low- and moderate-income earners need more than financial literacy to have financial stability – to life.”
The research will be conducted via a randomized control study implemented by Dr. Matthew Notowidigdo from the Chicago Booth School of Business and Dr. Raymond Kluender from Harvard Business School. The objective is to glean granular data on a number of indices to create a robust picture of low-wage savers, the organization said.
To Run Through 2023
According to America Saves, Even’s financial benefits platform is designed to provide financial resiliency and control to employees.
“Through a holistic approach, Even pairs earned wage access with powerful tools for budgeting, emergency savings, and visibility into projected net earnings to better support the financial health of its users,” America Saves said. “To date, Even has helped employees access more than $3 billion in on-demand pay and helped members set aside over $250 million for emergency savings.”
The initiative kicks off in 2022 and will run through the end of 2023 with the first round of funds dispersing in spring 2022.