Consumer Savings App Strategies and Savings Outcomes
This staff report provides new insights into the automated saving rules consumers use, like saving every payday or with each purchase. Our research focuses on what saving rules consumers use and how these rules relate to the amount saved. Using proprietary data from Qapital, a personal finance management app, we find:
- Saving rules that are contingent on spending, such as rounding up each purchase, are the most popular rule category (81 percent of savings goals use this kind of rule). This is followed by guaranteed saving rules like saving every payday (41 percent) and rules that are contingent on nonfinancial behaviors or events like saving with each workout (2 percent).
- Guaranteed saving rules are associated with greater savings than contingent rules. Specifically, guaranteed saving rules are associated with roughly a 1.5 to 3.5 times larger increase in the maximum amount saved within a year and in the likelihood of achieving specific milestones (e.g., $500, $1,000) within a year than either category of contingent rules.
Our findings reveal an intriguing pattern of results—contingent spending rules are the most popular, but these rules are associated with lower savings accumulation than guaranteed saving rules. We discuss potential implications of this finding in the report.