When it comes to money in a savings account, a new survey finds even a little can go a long way — towards keeping the lights on, avoiding high-interest loans and staying in your house.

As the personal savings rates slips nationally and lawmakers debate a COVID-19 relief package injecting more cash into struggling households, Thursday’s survey suggests noticeable benefits can come with keeping as little as $100 in a savings account.

It’s a bit of good news for people who find the advice about maintaining an emergency fund for three months’ expenses a tip that’s simply out of reach.

The study, from the FINRA Investor Education Foundation and SaverLife, looked at savings account activity for nearly 700 people between January and March, and then caught up with them for a survey in February and May.

The researchers found:

• On average, 19% of people who kept at least $100 in their account over three months experienced a utility shutdown of some sort in the past five years, like a cutoff on gas, electricity or a cell phone. 37% of people with accounts at $100 or below went through the same thing.

• On average, 23% of people with at least $100 used high-interest loans, like payday loans and auto title loans and went to places like pawn shops in the past five years. It was 42% for people who had $100 or less.

• On average, 17% of people maintaining at least $250 in their account for three months said they had to move in the last five years because they could not afford their place. By contrast, 29% of people with $250 or less said they had to move in the past five years due to finances.

“Even a small dollar cushion can improve a household’s financial situation,” said Gary Mottola, research director at the FINRA Investor Education Foundation, the educational arm of the nonprofit organization regulating the brokerage industry. SaverLife, which teamed up with the FINRA Foundation on the survey, is a financial-technology company incentivizing savings.

It’s easy to figure how more money can make everyday life easier, but how exactly do these savings factor in here? It’s unclear whether there’s something special about dollar thresholds like $100 and $250, Mottola said, but he thinks it’s a matter of correlation, not causation.

Someone with enough money in their account could afford at least partial utility payments to keep the lights on and they have some liquidity to sidestep high-cost loans that offer quick money upfront, Mottola said. But people typically can’t make partial rent or mortgage payments, he said.

“One hypothesis is small dollar amounts prevent negative chains of events,” Mottola said. With even a little bit of extra money to partially pay other costs, Mottola said a person may still have enough for rent and be able to avoid high-cost loans that could make rent and mortgage payments more difficult down the road.

While the goal of three months of expenses in a rainy day account may seem difficult and “demotivating,” Mottola said “smaller achievable saving goals can motivate families to save and give them a sense of hope that they can handle unexpected financial challenges.”

In October, Americans, on average, saved 13.6% of their disposable monthly income, according to the Commerce Department’s Bureau of Economic Analysis. That continues a months-long slide from April, when the rate hit a record high of 33% as consumer monthly spending fell and income rose, boosted by stimulus money.

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As talks over another relief package continue, direct $600 checks and supplemental federal $300 unemployment insurance payments are some of the debated provisions.

‘The journey towards a savings goal doesn’t exist in a vacuum’

The latest survey may serve as another reminder on the importance of having a savings account — but that’s easier said than done if the pandemic is making household cash is sparse and snuffing job prospects. Nearly one in four people recently said they’d be in financial “survival mode” in 2021, where they’d be focusing on getting by day to day, not saving for the future.

Bruce McClary, the National Foundation for Credit Counseling’s senior vice president of communications, gets that. “Reality can be pretty harsh,” he said. “The journey toward a savings goal doesn’t exist in a vacuum.”

Nevertheless, there are things people can do to get on the right path, he said.

Websites like AmericaSaves.org, a campaign run by the Consumer Federation of America, and the Consumer Financial Protection Bureau offer free resources for people who want to learn more about how to build up their savings.

McClary’s organization is a network of non-profit financial counseling organization across the country and the NFCC website offers ways for people to get in touch with non-profit counselors who can help them with budgeting plans, savings goals and debt management.

Savings is a matter of dollars and cents, but it’s also a psychological matter that involves motivations and habits, McClary said. For example, there are two different approaches to paying down debt and building savings. There’s the so-called “snowball” method of paying off debts from the smallest to the largest and there’s the “avalanche” method of paying off debts, starting with the ones with the highest interest rates.

It comes down to which approaches keep someone personally engaged in getting ahead, McClary said.

Someone building their savings right now shouldn’t beat themselves up for using it or contributing less than occasionally planned, McClary said. “There are acceptable purposes for dipping into savings. It’s not like you’re creating something you never intended to use. … You set the rules. You’re the one who defines what’s an acceptable purpose.”

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