How Behavior Builds Wealth: A Conversation with Leigh Phillips

Show Notes

• Guest: Leigh Phillips 
• Host: Adam Walker
• Publication Date: July 11, 2023

Highlights

0:41 | Leigh explains the mission of nonprofit Saver Life and how they help people build their savings.

1:26 | Leigh talks about the financial tightrope most American families are walking because of a lack of savings.

3:43 | Leigh talks about the ways that Saver Life helps people build a healthy savings habit.

7:05 | Leigh discusses the importance of getting people the right content and resources to overcome their specific challenges.

10:45 | Adam and Leigh go in-depth on how Saver Life works.

Episode Transcript

Adam Walker: My guest on the show today is Leigh Phillips. Leigh is the CEO of Saver Life. You can find out more about that at savorlife.org. Leigh, welcome to the show.

Leigh Phillips: Thanks so much for having me. It's great to be here.  

Adam Walker: I can't wait to hear more about what Save Life does. And so we're having you on the show. I just wanna kind of tee up this conversation. We're having you on the show because you are partnering with MMI to more effectively help people I guess save money and build financial health.

So, let's start with you and what you're about and what Savor Life does. And then I'd like to talk more about how you're gonna partner with MMI.

Leigh Phillips: Sounds great. So Save Life is a national organization. We are a financial technology and advocacy group focused on helping millions of Americans who live paycheck to save money and improve their financial health.

So we do that in a number of ways. Anyone can join at saverlife.org. Or you can download our mobile app in the App store. And so what we're really focused on, Adam, is encouraging people to build a habit of savings, to build an emergency fund to make sure that they can get through income disruptions or expense shocks without going into debt.

So for millions of Americans in this country, maybe half or more are living paycheck to paycheck with almost nothing left over for saving. In fact we know that about 40% of American households couldn't come up with $400 in the event of an emergency without going into debt. So there's a lot of financial insecurity in this country and we know that savings plays a really big role in making sure that families can stay on track towards financial goals. And you know, and live their lives in the way that they the way that they wish to. So save life is really grounded in behavioral science. So we look at making, saving money easy, rewarding, fun, keeping it top of mind.

So we do a lot of prize link savings and challenges. You sign up for Saver Life, you link your bank account and when we see you saving, we enter you into raffles and challenges. And it's like a no lose lottery, right? You can win money for saving money. Which is really great. We also really focus on providing useful information and resources to households who are low to moderate income.

So a lot of the financial content, the financial advice that's out there, it's really about higher income people, right? And talking about things that may seem out of reach for families with lower incomes. So we are really focused on understanding the complexities of people's financial lives. So that may mean that families have some of their income from a job, some of it from self-employment, some of it from public benefits or tax credits.

So the financial picture for a lot of households is more complicated than, you know, one or two wage owners getting paid the same amount of money. Every two weeks, right? We know that people with lower incomes have big fluctuations in their income and in their expenses, which makes saving really difficult. And that's where the partnership comes in with MMI. It's allowing us to offer even more services to people because we know people need a lot right now.

Adam Walker: Yeah, absolutely. People do need a lot right now, and I love what you're doing, encouraging, saving using cognitive science to, to offer rewards for that. Like, that's such a big deal and kind of amazing.

So just a few kind of quick questions before we get to the MMI partnership. I'm just curious, like you mentioned, you know, people with paycheck to paycheck and they need to save for an emergency fund. Any, like, I'm just personally asking like what, how much do people save for an emergency fund typically?

Leigh Phillips: Well, we really focus on just encouraging people to get into the habit of savings. Okay? So we focus a lot more on habit and frequency, and so wanting people to put a little bit aside as they can, you know, yeah. Ideally every week or every paycheck, but some people, that's not possible, right?

So one of the things we're really aware of is understanding that not everyone can save money at high rates. And that kind of puts it out of reach for a lot of people, right? Right. So if you come out and you say, you know, you gotta save a million dollars for retirement, or, you know, we've got kids, right? So college is gonna cost a bazillion dollars. It just seems out of reach for a lot of people. So what we focus on is encouraging people to save consistently and to save in amounts that are affordable to them.

So our challenges are, you know, save $25 in a month you know, and you can be entered to win. We encourage people to save at times where maybe they have more coming in, like tax time. So we do a lot of focus around helping people maximize their tax refunds and put some of that money aside for savings. So, you know, there's a lot of rules out there about how much you should have, et cetera, et cetera, but they don't apply to everyone. And they can be really, in some ways backfire when you're trying to encourage people to save who, that may be a challenging thing to think about. 

Adam Walker: I love what you said, like you're encouraging the habit of saving, like, I, I love, like cuz so much of our money gets spent based on habits and so if we create good habits, Then they endure a much longer time. And we can do so much more that way. So I love that. That's amazing.

So, so talk a little bit more about the partnership with MMI and how that's gonna benefit you know, you and MMI. I'd love to hear more about that.

Leigh Phillips: Yeah, so one of the big reasons why people struggle to save is because of debt. And you know, so millions of people in this country have a lot of debt, often unsecured debt in the form of credit cards, or they may be struggling with, you know, high payments, medical debt, student loan debt, all sorts of other things. And what we see in our data is that people who have a lot of debt, that's a big chunk of your income, right? It can be going to interest and fees and penalties and all these other things.

So one of the things we know is really important is to how do we help people manage their debt and also save, right? So a lot of the time people say, well, If you're in debt, shouldn't you be focused on paying down your debt instead of saving money? In fact, you should be focused on both, right? Because if you don't focus on saving while you're paying down your debt, the next time something happens, you're just going straight back into debt, right? So in order to break. Those cycles, we need to do a couple things.

So one of those things is accessing the services like MMI offers and making sure people have access to the information support and counseling that they need to be able to really focus on their financial goals. And for us to be able to provide now that service to our Saver Life members is really great. And then on the other side of that, being able to make sure that when MMI is helping their clients and they're getting kind of into a place where maybe they're able to think about saving, that they can join, save life and receive those rewards and encouragement to get back on from financial footing.

Adam Walker: I love that. I love that. And you also mentioned earlier, you know, that save your life. You create a lot of content to sort of help people think about saving and help them save and learn. Can you talk a little bit more about what you create and what's out there that our listeners might be interested in checking out?

Leigh Phillips: Yeah, so we focus on just in time relevant content for people, right? So there's not a lot of information out there that shows that financial education programs are really that, that effective. What seems to be more effective are services like the ones MMI provide, right? When you're looking at people who have a goal or people who are in crisis, and they really need that help in the moment to kind of get them into a different place. Or timely, relevant, useful information.

And so, saver Life is a financial technology company. We're a nonprofit. And what that means is that we can generate a lot of content and when people are searching for things on the internet, they find save life. So that content could look like it does look like a lot of different things. So you're gonna find you know, money one on 1 0 1 kind of content, right? Like budgeting and how credit works and all that kinda stuff. But you're also gonna find more specific information that might be relevant to, to your situation.

So, say you're a gig worker, right? Like, say you're driving for you know, Uber or Lyft or DoorDash, or you're earning some of your income from self-employment. It can be really hard for people to figure out how to file their taxes, but we know you can get a lot of money back. You can, you know, to get a lot of deductions. So we'll provide content and information to people about how to file your taxes and if you're self-employed. We also tell people about government benefits and services.

So what we're focused on here is the connection between the really looking at helping people reduce their costs of consumption. So, Again, when we think about saving money, and we think about, you know, higher income people, oftentimes we think about over consumption, right? That people are spending too much money when people don't have a lot of money. That's really not what's going on, right? Like people aren't overspending. It's not the latte problem, right? Like this is. I don't have enough money to make it through the month. You know, like I routinely have expenses that exceed my income.

So we're really focused on helping people maximize their income and reduce their expenses. So that could mean making sure people are signed up for their government broadband discount programs. It could, or your utility company discount programs that are accessible to you or getting a better deal on insurance. So making sure that people are not overpaying for the things that they need. And then also having opportunities for income along the way.

Adam Walker: So I'm curious, like, to, to zero in on that, like reducing the cost of consumption. I mean, do you have any other like, practical examples that, that our listeners might consider along those lines as well?

Leigh Phillips: Yeah, so I, I think like, first off, making sure that you are enrolled in everything that you're eligible for. There's a lot of programs out there and those are things that are designed to help working families and people should be taking an advantage of everything that they're that they're eligible and entitled to. So like I said, that can look like. Looking at your bills, right? Like, and how much you're spending and is there discounts in ways that you could work with that? Working with groups like MMI to think about reducing the cost of your debt, right?

So, if you're paying interest on multiple cards, are there ways to look at consolidating your debt or really reducing those costs and making sure you're doing it with a reputable company that is supported through the federal government is not some kind of scam, you know, that you saw on late night tv. That is That people are credentialed to be giving you that help and that advice, and that you're getting it from a trusted source. So that's another way that people can really start to take back control of their financial lives.

Adam Walker: So, so I'm curious I just wanna make sure I understand how it works. So, Your app ties, I believe ties in with the bank account, sort of tracks savings, gives people points along the way, and then enters them in sort of, sort of, not goals. What's the word you said? Raffles, I think you said raffles to sort of win things. And it helps to change behavior and build better habits.

So I'm curious do you have any what's the word? Any wins that you could share with us? Like any stories of like, I'd love to hear more about like how it's affecting individual. I saw some great testimonials on your website, like could you talk a little bit more about that?

Leigh Phillips: Yeah. So saving money is something that we all want to do and know we should do, but it's the kind of thing that it's really easy to put off until tomorrow, right? And so being able to do this through an app means anyone in this country can join. You can sign up for Save a Life, and you can do it in the moment, right when you're thinking, this is the moment when I wanna start doing this. And and know that you're gonna get that support along the way.

So over the last few years, we've reached over 600,000 people across the country. People more double their savings rates after they join saver Life. And about 60% of people who see making gains in their overall financial health. So not just saving, also looking at their credit and debt and how they kind of feel about their financial situation. So yeah, we have a lot of really great stories.

We did a we did a big push last week last year on micro entrepreneurship. And so we actually were working to encourage people who were micro entrepreneurs to join Save Live, and And they could start saving and they could get content about how to run their businesses, how to file their taxes, all this stuff.

And we had a $5,000 winner, Alexandria, who's in Tennessee, I believe, and she and her husband have a screen printing business, you know, with t-shirts and things like that, that they make. And they. We're gonna use this money in order to really be able to spend the time on their business. Cuz for a lot of people who are entrepreneurs, you've still gotta pay the bills, right? Like you can't stop work for like three months so you can get your business off the ground. So people are like, you know, they're scrappy and they're working and they're trying to do all these things. So they were gonna use that money for a little breathing room, you know, so they could really work on building out their finances and learning how to save.

Adam Walker: I love that. That's so amazing. I love that. Well, thank you for sharing that story. Well, I mean, so, so this sounds like a pretty great partnership. I mean, like you said, you know, people need to pay off to reduce their debt, but while they're doing that they do need to save so they don't incur additional debt. So it seems like an amazing partnership. I'm very excited about this.

I guess I would ask you, do you have any final thoughts for anybody that's listening that's maybe wants to do more saving or wants to improve their financial situation?

Leigh Phillips: You know, I would say that things are difficult right now. They're difficult a lot of the time for a lot of people, unfortunately. And so I would first off say you're not alone. Millions of people in this country, probably half or more are struggling financially, living paycheck to paycheck. But I would say there is. There's help out there, right?

So it's if debt is something that you're struggling with or feeling overwhelmed with, groups like MMI are there to help you. If you wanna be inspired to save, if you wanna read stories about other people who are saving and, you know, making headway with their financial lives, you can join, Saver Life. Maybe you'll win a little money. For saving, but you'll definitely find that encouragement along the way.

So, you know, I would say that starting small with small, achievable goals is really what we find pays off. And knowing that you can do it and that, you know, thousands of people are saving, will save their life every day.

Adam Walker: I love it. And if you wanna save with Savor life where should they go to do that?

Leigh Phillips: So you can go to saverlife.org. Anyone can sign up. It's a hundred percent free. We are a nonprofit. We don't charge anyone to use Saver Life. We're funded through you know, charitable contributions and philanthropy, which is means that we can offer this to everyone for free. So saverlife.org. If you're over age 18, you have an email address and link your bank account if you want to enter challenges and win prizes. We also have an app in the app and Android app stores, so you can download that also for free and and sign up and start saving and accessing all the great content and other things we have to offer. 

Adam Walker: I love that. Well, Leigh thank you for joining us on the show today. Thank you for your partnership with MMI. I think it's gonna be amazing and I really appreciate the work that you're doing.

Leigh Phillips: Thank you so much. It was a real pleasure.

Adam Walker: To learn more about how MMI helps people from all walks of life get unstuck and out of the vicious cycle of debt through personalized solutions that inspire hope, visit moneymanagement.org. This episode was produced by Edgewise Media. Script writing and production by Clara Jennings. Editing by Brandon Ellis and show hosting by me, Adam Walker.

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