The Trouble With Incentivizing Saving
Nicole Dieker

I fail to see how it’s a bad thing that many of the active savings accounts were treated similarly to checking accounts. I’m solidly middle class, and even I have a savings account that I use that way.

My husband and I have a joint checking account that we use for bills and daily expenses. Then we have two savings accounts — one that’s largely inactive, but contains a moderately sized rainy day fund, and another that essentially serves as a checking account for discretionary spending. Why? Because the nature of a savings account provides friction against spending. With a checking account, it’s very easy to swipe your debit card or write a check for that sweater that’s on sale, or the rug at HomeGoods that would perfectly match the foyer. On the other hand, having to drive across town to the bank during banking hours to withdraw money from your savings account is inconvenient, and gives you ample time to consider whether that rug or sweater would really be a good purchase. Plus, the very nature of a savings account adds a little guilt to the whole transaction — withdrawing $15 from your savings is a tad embarrassing, and as you inform the teller that it’s a savings account, you can’t help but remind yourself that you’re stealing from your future big ticket purchases.

Poor people aren’t exactly in a position to save up enough to cover six months of expenses. However, I imagine that the friction created by having to go by the check cashing branch to withdraw from the savings account IS encouraging better uses of discretionary spending. The results may not be a massive savings, but if the person ends up saving $10 a month, that’s still real progress!

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