The hidden financial lives of low-income households

Jonathan Morduch is currently working with colleagues at Glasgow Caledonian University’s Yunus Centre for Social Business & Health on ‘FinWell’, a research project funded by the Chief Scientist Office of the Scottish Government’s Department of Health exploring the links between microcredit and health. FinWell uses the financial diaries methodology introduced by Jonathan and colleagues in the book Portfolios of the Poor and, subsequently, refined in the US Financial Diaries (USFD) initiative.

In this seminar, Jonathan offered an unprecedented look at the financial lives of working Americans and new insights for designing policies, programmes and products that can help make their lives better. New research indicates that current programs and policies for helping families escape poverty, build stability, move up the ladder, and invest in the future are based on an outdated understanding of what their financial lives look like - one that no longer reflects reality. In USFD, 235 low- and moderate-income American households participated over the course of a year, allowing researchers to closely examine their day-to-day financial lives. This covered issues such as assets and debts, cash flows in and out of the households, financial instruments used, employment, financial goals, and attitudes about money. The study offers data and stories that explore the financial realities of these households, and how people’s finances and options influence - and are influenced by - other aspects of their lives.