Nearly 40 percent of Americans have less than a month of income saved. A third of Americans have no emergency savings at all. And most people, even those with access to a defined contribution plan at work such as a 401(k), are not saving enough for retirement.
“One unexpected major expense—like replacing a broken refrigerator—would put a quarter of Americans into expensive debt, or at the very least, throw their life plans off balance,” says Sean Ellis, the director of analytics at the University of Pennsylvania’s Behavior Change for Good Initiative. “It is a serious issue.”
Ellis, along with a team led by Wharton professor Katherine Milkman and joined by Kellogg professor of economics and finance Dean Karlan, sought to leverage their expertise in behavioral economics to help address this concerning trend.