How to Trick People Into Saving Money
Late last summer, Dawn Paquin started keeping her money on a prepaid debit card from Walmart instead of in a traditional checking account. The wages from her factory job—she works from 9 p.m. to 5 a.m., inspecting blades on industrial bread-slicing machines—now go directly onto the Visa-branded card, which she can use like a regular debit card, though unlike most debit cards, it is not linked to a checking or savings account. She made the switch after a $4 check she wrote to buy coffee for herself and a friend tipped her checking account below the required minimum and triggered $100 in overdraft fees.
This was before she got the factory gig, and she wasn’t working full-time. Paquin lives in Salem, Illinois, where, she told me recently, if you don’t have a college degree, your job choices are “fast food or factory.” Money was extremely tight. “I kind of had a bit of resentment about banks after that,” she said dryly.
The card is more convenient, Paquin said, and she doesn’t have to worry about monthly statements; she tracks her money, and pays all her bills, with the card’s associated phone app. But even with the job, money remains tight. Paquin is divorced, with two sons, and shares a car with her boyfriend.
Like many Americans, Paquin thinks about the importance of saving more often than she actually saves. In a 2015 Federal Reserve Board survey, 46 percent of respondents reported that they would have trouble coming up with $400 in an emergency; living paycheck to paycheck is now a commonplace middle-class experience. So while Paquin noticed that her Walmart MoneyCard app asked her from time to time whether she wanted to “stash” some money, she didn’t bother to figure out what that actually meant, let alone respond.
Then, late last year, she got an email saying that a “prize savings” feature had been added to her card. If she kept some of her balance in a virtual “vault,” meaning that it would not show,” she remembers realizing. So when she got paid, she started setting aside “10 bucks, 20 bucks, whatever I could.”
