But what does that mean for long-term financial wellbeing?
Relatively little research has examined the role of household liquidity to financial wellbeing over time.
This amount represents roughly one month of income for the average and median low-income household in this studys sample.
This estimate compares with an 18 percent probability for households with less than $2,452 in savings.
It is important to note that this analysis speaks to correlation and not causation.
If this were the case, the savings buffer may not be contributing to the long-term decline in hardship.
A household could, instead, choose to consume any extra discretionary income.
Conclusion:These results point to the power of liquid assets in sustaining financial wellbeing over time.
They also bolster other recent research findings that savings is a dynamic process of accumulation and decumulation.
These are important takeaways for policy and product design to better meet peoples real financial needs.
