Mathieu R. Despard|Terri Friedline|Stacia Martin-West
Why Do Households Lack Emergency Savings? The Role of Financial Capability
University of North Carolina at Greensboro|University of Michigan–Ann Arbor|University of Tennessee at Knoxville
many us households insufficient savings cope income losses expenditure shocks financial emergencies yet little research evidence explains guided sherraden 2013 model financial capability expand prior research examines role financial knowledge incorporating additional factors testing income interactions explain greater proportion variance concerning whether households money set aside emergencies analyzed data 2009 2012 2015 2018 national financial capability surveys found subjective financial knowledge financial confidence savings account ownership objective financial knowledge significant consistent predictors emergency fund savings account ownership strongest predictor accounting increase probability emergency fund 25 29 across study years adding homeownership ability cover expenses models increased proportion variance explained average 29 strategies promote emergency savings multifaceted include help financial educators counselors create greater financial slack well programs policies increase access shortterm savings opportunities incentives