This is kind of good news for people who find the advice on maintaining an emergency fund for three-month expenses is simply out of reach.

The study, by the FINRA Investor Education Foundation and SaverLife, looked at the savings account activity of nearly 700 people between January and March, then caught up with them for a survey in February and May.

The researchers found:

• On average, 19% of people who have kept at least $ 100 in their account for three months have experienced some kind of utility shutdown in the past five years, such as a gas, electricity or power cut. cellphone. 37% of people with accounts of $ 100 or less have been through the same thing.

• On average, 23% of people with $ 100 or more used high-interest loans, like payday loans and auto title loans, and went to places like pawn shops in Canada. over the past five years. It was 42%. 100 for people who had $ 100 or less.

• On average, 17% of people who kept at least $ 250 in their account for three months said they had to move in the past five years because they could not afford to pay for their seat. In contrast, 29% of people with $ 250 or less said they had to move in the past five years for financial reasons.

“Even a small dollar cushion can improve a household’s financial situation,” said Gary Mottola, research director at the FINRA Investor Education Foundation, the educational arm of the nonprofit organization regulating the brokerage industry. SaverLife, which partnered with the FINRA Foundation for the survey, is a savings-incentive financial technology company.

It’s easy to see how more money can make everyday life easier, but how exactly are those savings factored into here? It’s unclear if there’s anything special about dollar thresholds like $ 100 and $ 250, Mottola said, but he thinks it’s a matter of correlation, not causation.

Someone with enough money in their account could afford at least partial utility payments to keep the lights on and they have cash to avoid high-cost loans that deliver cash quickly, Mottola said. . But people usually can’t make partial rent or mortgage payments, he said.

“One assumption is that small amounts prevent chains of negative events,” Mottola said. With even a little extra money to partially pay for other costs, Mottola said a person may still have enough rent and be able to avoid high-cost loans that could make rent payments and d more difficult mortgage term.

While the goal of three months of spending in a rainy day account may seem difficult and “demotivating,” Mottola said that “smaller, achievable savings goals can motivate families to save and make them feel more secure. hope of being able to face unexpected financial challenges ”.

In October, Americans saved an average of 13.6% of their monthly disposable income, according to the Commerce Department’s Bureau of Economic Analysis. This continues a multi-month decline since April, when the rate hit an all-time high of 33% as monthly consumer spending plummeted and incomes rose, boosted by stimulus funds.

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As talks on another relief plan continue, direct checks of $ 600 and additional federal unemployment insurance payments of $ 300 are among the provisions being debated.

“The path to a savings goal does not exist in a vacuum”

The latest survey may serve as yet another reminder of the importance of having a savings account – but it’s easier said than done if the pandemic is making household money scarce and stifling prospects for savings. ‘use. Nearly one in four people recently said they will be in financial “survival mode” in 2021, where they will focus on day-to-day management, not saving for the future.

Bruce McClary, senior vice president of communications for the National Foundation for Credit Counseling, understands this. “Reality can be pretty harsh,” he said. “The journey to a savings goal does not exist in a vacuum. ”

Nonetheless, there are things people can do to get started on the right path, he said.

Websites like AmericaSaves.org, a campaign led by the Consumer Federation of America, and the Consumer Financial Protection Bureau offer free resources for people who want to learn more about how to build their savings.

McClary’s organization is a network of nonprofit financial advisory organizations across the country, and the NFCC website provides ways for people to connect with nonprofit advisors who can help them with budgeting plans, savings goals and debt management.

Savings are about dollars and cents, but it’s also a psychological issue that involves motivations and habits, McClary said. For example, there are two different approaches to paying off debt and saving. There is the so-called “snowball” method for paying off debts from the smallest to the largest and there is the “avalanche” method for paying off debts, starting with those with the highest interest rates. students.

It’s about what approaches allow someone to personally commit to moving forward, McClary said.

Someone who is building their savings right now shouldn’t blame themselves for using it or contributing less than expected on occasion, McClary said. “There are acceptable purposes for tapping into savings. It’s not like you’re creating something that you never intended to use. … You set the rules. You define what an acceptable goal is.