Income volatility has become the new normal. The shift from careers, to jobs, to being paid for tasks, means it’s harder than ever before for a massive portion of Americans to predict their monthly incomes. The challenges of expense volatility from month to month along with the new reality of income volatility, compounds an already stressful financial situation for most Americans. In fact, our own research shows that 70% of our customers face income volatility, with more than one third seeing fluctuations of more than $200 each month. To top it off, it’s estimated that ~56% of Americans don’t have access to traditional financial services -- things that help smooth out those bumps, like checking accounts or credit cards. That doesn’t leave them with a lot of options for making ends meet in today’s new economic and workforce reality.
We firmly believe that in order to create financial products that serve the needs of Americans today, we have to approach the problem in a new way. We have a bold mission and have built a team as diverse as our customer base to tackle the challenge. Yet we also recognize that income volatility is an issue far bigger than what we can solve on our own.
That’s why today, in partnership with The Aspen Institute’s Financial Security Program, we’re launching Finance Forward, an actionable series in cities across the U.S. focused on the issue of income volatility. For the first time ever, our series will bring together elected officials, businesses, community advocates, and nonprofit leaders to discuss the growing problem of income volatility in the U.S., and solutions to help slow its devastating effects. We hope to raise the issue of financial instability across America, and make it a priority. One that’s on the level of other core issues like education and national security.
You can read more about our partnership here.
Beyond increasing general awareness of the issues, there are a few tangible outcomes we hope to achieve with this series:
- Inspire more companies to identify and build solutions
- Help employers understand how income volatility and financial instability impact their employees, their financial health, and their overall health as an employee
- Drive improvements to the Community Reinvestment Act rules
- Guide communities -- from elected officials and tax dollars to academia, non-profits and employers -- to work together and commit to finding solutions in their own backyard
Solving for these kinds of issues takes work, patience and commitment. We know there is no silver bullet. A complicated and far-reaching challenge like income volatility requires a movement -- a national dialogue on the issue that can be implemented locally. We must look beyond abstract analyses to get a comprehensive understanding of the impact, and of possible solutions. We need ideas, from public, private, and nonprofit groups.
We are so proud to partner with The Aspen Institute, and to be joined by others like Pew Charitable Trusts, Cities for Financial Empowerment Fund, The Urban Institute, Cooperative Ministries and several local partners. We’re excited by the powerful leadership of people like Mayor Benjamin, the Mayor of Columbia, South Carolina, and others who’ve jumped at the chance to inaugurate the Finance Forward national tour. We’re looking forward to leveraging these national organizations’ years of research and experience studying these issues, and to harness our local experts’ knowledge of the communities in which they work. For our part, we’re thrilled to bring the insights of middle America back to the coasts, and to bring the best of Silicon Valley to real world America.
Our first stop is next week, in Columbia, South Carolina and we’re eager to get to as many cities and states as we can in the coming months. Want to join us? I’d love to hear from you.
Sasha Orloff is the Co-Founder and CEO of LendUp.