CHARLES SCHWAB FOUNDATION

Build Financial Resilience

Challenge

The Charles Schwab Foundation wanted to fulfill its mission to improve the financial lives of nonprofit employees by developing a solution rooted in behavioral economics.

Story

Volatility is the root problem derailing the financial lives of low and middle income Americans

Mismatched timing of costs and income, amplified by lack of a savings buffer, is the main cause of financial instability. Costly borrowing sources, such as payday loans and pawn shops are readily available and compound the challenge in the path to achieve financial resilience. Volatility is inevitable, but going off track and not being able to get back on one's feet should not be.

Doing

To improve the financial lives of individuals, behavioral change is needed

We combined the insights of extensive ethnographic research with behavioral design principles to develop Sidekick - a new product that encourages behavioral change to help individuals build financial resilience. We prototyped Sidekick and tested it with nonprofit employees. We then created a detailed pilot program, implementation and partnership plan, working with program managers, issuer banks and the finance experts.

  1. Product

    Introducing the habit of smart budgeting and saving into people’s everyday lives

    Sidekick is a prepaid card and an app for helping people limit their spending on discretionary items, and funneling the savings into a savings account, thereby creating a foundation of financial resilience.

  2. Limits

    Making budgeting for everyday items easy and fun

    One of the main hurdles of budgeting is the complexity of figuring out one's entire financial life. With Sidekick, users focus on discretionary spendings only, making it simpler to take the first step. Short weekly cycles and ongoing content to encourage and support users keep them engaged and make it easier to stick to the set limits.

  3. Saving

    Removing hassle to increase savings

    Our research showed that Sidekick's target audience were committed to saving money, but among other challenges, they faced difficulties to open a savings account and lacked the discipline to set aside a portion of their income. We solved for that need by linking savings to the prepaid card. At the end of each cycle, Sidekick automatically saves any money not spent, making the process effortless and helping them visualize their cushion of savings grow over time.