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Saving among Low-Income Women: Motivation and Obstacles

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  • Helen Levy

    (University of Michigan)

  • Kristin Seefeldt

    (University of Michigan)

Abstract

How do low-income households think about saving? What motivations do they identify for saving, and what obstacles to meeting their goals? We use data from qualitative interviews with 51 households in Detroit to shed light on these questions. We find that they wish they could save - primarily for protection against the unexpected or to put children through college - but that most of them cannot. Friends and family surface as a major obstacle to saving, since those who have liquid assets are asked for help. When savings is feasible in this population, it occurs largely through relatively inaccessible vehicles such as pensions and 401Ks.

Suggested Citation

  • Helen Levy & Kristin Seefeldt, 2008. "Saving among Low-Income Women: Motivation and Obstacles," Working Papers wp199, University of Michigan, Michigan Retirement Research Center.
    • Handle: RePEc:mrr:papers:wp199
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    References listed on IDEAS

    as
    1. Martin Browning & Annamaria Lusardi, 1996. "Household Saving: Micro Theories and Micro Facts," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1797-1855, December.
    2. Brigitte C. Madrian & Dennis F. Shea, 2001. "The Power of Suggestion: Inertia in 401(k) Participation and Savings Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1149-1187.
    3. Steven J. Haider & Kathleen McGarry, 2005. "Recent Trends in Resource Sharing Among the Poor," NBER Working Papers 11612, National Bureau of Economic Research, Inc.
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