A Financial Solutions Lab Brief on Household Cash Flow Challenges

The bills are due today, but payday is a few days away—the lack of funds to make ends meet poses a common challenge. To bridge the gap, some households can tap into a savings account or shift spending to a credit card.

However, for the many Americans without an extra savings cushion or access to reliable credit, easy solutions are scarce. These households face a constant juggle that creates inconvenience, stress, and additional expenses such as late fees, overdraft penalties, or higher-cost credit. Further, the demands of short-term money management tax the focus of many households and prevent them from building the savings and assets that they need to improve their financial health in the long run.

By leveraging technology, financial service providers have a significant chance to help consumers improve their ability to manage household cash flow. This brief explores the challenge of household cash flow challenges, its impact on financial health, and the opportunity for innovation.