 And welcome to this CUBE conversation from the CUBE studios in Palo Alto, California. I'm your host, Sonia Tagare. And today we're joined by Lee Phillips, president and CEO of Saviour Life. Lee, welcome to the CUBE. Hi, thanks so much for having me. Absolutely. So tell us more about Saviour Life and how it works. So Saviour Life is a nonprofit organization. We work nationally, but we're based here in San Francisco. And our mission is to help working American families to save money and to invest in themselves and their futures. So we do that by making it engaging, rewarding and fun for people to start saving and leveraging financial technology to achieve scale. And you were previously known as Earn. So what spurred this change in branding? Well, it was more than a change in branding. It was actually a big shift towards technology. So Earn, or now known as Saviour Life, has actually been around since 2001. So we are not new. We're not a startup. We've been helping low to moderate income working families to save money for a long time. But what we've realized in recent years is that the size of the problem is really quite significant. So about half of American families don't have $400. So they couldn't cover a $400 expense without having to borrow the money. As Earn, we were helping a lot of families here in the Bay Area, but maybe a thousand families a year at our peak. And when you have half of America that's financially insecure, we knew that the solution that we had wasn't big enough. So a couple of years ago, the organization decided to make a pivot and to make a pivot towards technology. I came on board about four and a half years ago to lead that transition. And we launched Saviour Life as a product and we reached a quarter of a million people in a couple years and decided that the people know best and that we would rebrand the whole organization as Saviour Life. So that's kind of how that came about. That's awesome. So who is Saviour Life specifically targeting and are there any specific challenges with this target group? So Saviour Life is specifically targeting working American families, mostly low income families. So as I mentioned, financial insecurity is a really big problem here in the U.S. And so we hear about that a lot in the news about income inequality, wealth inequality. But one of the most troubling statistics is came out from the Federal Reserve Bank that found that about 42% of American families couldn't cover a $400 expense without going into debt. And that's an issue that affects lots of people in different ways. So Saviour Life is really targeting low income people who are struggling to save money and need a little help getting started with that. So most of our clients are women. They're all across the United States and on average make about $25,000 a year or less. So let's talk about the current savings crisis in America. According to Bankrate, 28% of Americans don't have emergency savings and only 18% of Americans can live off their savings for only six months. So tell us more about this crisis and what do you think the underlying issue is? Yeah, it's a great question and there are many issues that play into that and most of them are systemic, the way that people are making money and the gap between income and expenses. So what we see is that larger numbers of people don't have basic emergency savings and what that means is that you can't get through a financial emergency, right? And so that can have a real downward spiral effect on your life. So imagine a scenario where you have to miss a day or two of work because your child is sick and you don't have sick leave. Like a lot of people don't. And so you miss a couple of days of income or you get a flat tire or a parking ticket. Those are the types of things that can really spiral out of control. So then you lose income, then you can't pay your rent, you're at risk of eviction and all of these other problems. So what we know is that having relatively small amount of money, so even just $250 to $750 in savings is found to reduce those risks of things like eviction or falling behind on bills and utilities really significantly. So we're focused on getting people to that point so that they can get through challenges. So one of the big things that we see in our population isn't just that wages are low, which remains a really big problem in the US right now, but that income is really inconsistent. So if you're making an hourly wage job and maybe you work in retail or you work in a warehouse or something like that and you drive for Uber, whatever the case may be, your money that's coming in, you're not getting the same amount of money in your paycheck every two weeks, right? Like many of us do. And in fact, for saver life clients, we're seeing these swings of income of around $1,000 a month, month over month. So sometimes you earn more and sometimes you earn less. So in that scenario, it's really hard to stay on track towards saving because you don't know how much money's coming in and then you're getting hit with all of these increasing expenses at the same time. Right. And can you tell us a little bit about how people can save their way to financial independence. Is it viable and how have challenges changed since the disappearance of defined benefit retirement packages? Yeah, so it is possible, but it's challenging. And I do think that we need to be aware of those kind of bigger issues, right? And to focus on helping people have more consistency in their income and reducing some of those large expenses, whether or not in the Bay Area, obviously the cost of housing, medical care, childcare, transportation, all of these things that are really holding families back. But the good news is that people are remarkable. People are resilient and people are remarkable. And I can share a couple of stories with you about that. So at SavourLife, we encourage people to save with prizes and cash rewards, right? So we make it really easy for people to get started. We also have a really supportive online community. So this is an issue that affects half of us, right? It's not something that people should be ashamed of. This is a really big and endemic issue here in the US. So we don't judge people, you know, it's all about starting small and starting today. So what we do at SavourLife is encourage people to save what they can, when they can, and then we use behavioral economics to design programmatic interventions, so features on the website that encourage people to save. So you can save five bucks a week, if that's what works for you, and then you have the chance to win prizes. We also do a tax time quest, so that's happening right now. So tax season is one of the times when people will get a larger infusion of cash, right? Particularly lower income people who may be a qualified for tax credits and other benefits. So what we do is encourage people to save a portion of that refund. So we ask people to start thinking about it before they get the refund, right? That's really clear, because once the money is in, it's usually already spent. So we start talking to people in December, why don't you pledge to save your refund? You can win prizes just for pledging. And what we found is that getting people to think about and commit to savings resulted last year and 80% of those people actually putting money into savings and saving on average $1,600 from the tax refunds. Wow, that's incredible. I love how you're incentivizing this whole savings thing because that essentially just makes people want to do it more. Yeah. So how should people bucket their savings? Should they have an emergency fund, a college fund, a retirement fund? How should they do that? So what we find at Save Our Life or what we promote is the idea that your money should really align with your values and what's important to you and what you want to achieve for yourself and for your family. So we don't tell people what to save for and we don't tell them what to spend their money on, right? So the biggest thing that people save for with the program is emergencies. So really having that financial cushion so that your car breaks down or whatever the case may be, you can take care of it without going into debt, right? Because that's the cycle that we want to avoid. But then we also see people really staying on track to save for big goals. And unsurprisingly, those are still the kind of goals that we talk about a lot in this country. So an education for yourself or for your children and home ownership, those remain kind of the most popular things that people are focused on. So when it comes to prioritizing how you should save, like especially for someone who's just coming off that one paycheck away from the street kind of, space, how would you recommend prioritizing your savings? So we focus on building a savings habit. That's kind of the number one thing that we want people to really think about. So putting money away as consistently as you can, it's really the behavior change that we're looking to see. And that's why we encourage people to make those small incremental steps. But we also know that life has a lot of ups and downs, right, particularly for people who are, as you say, living paycheck to paycheck. And so what we see in our data is that families are often making two deposits in one withdrawal. So they're putting money away. And then they're using that money when they need it to get through emergencies. So that's kind of the first thing that we really look to do is once you have that savings habit, and we know it's hard to do that, especially if you're not making a lot of money at this moment, but that's really whatever you can save to get into that habit of putting it away. And do you think people are more at risk of being paycheck away from being on the street or one big bill away from being on the street? Yeah, absolutely. Many people are. And especially here in the Bay Area, right, when life is extremely expensive, that the cost of housing is out of control and there's other expenses that people have to deal with. And then if you layer on top of that, that inconsistency in people's income, not making a regular amount of money, you're putting a lot of people in a very, very perilous situation. Right. So let's talk about financial empowerment. You were leading the Office of Financial Empowerment in the city and county of San Francisco. So tell us more about financial empowerment and why it's important for people to have it. So I started working for the city. I was there for about 11 years and before there was a thing called financial empowerment. And we started working on a range of programs. I worked for the San Francisco Treasurer. And what we're really looking to do is use the influence of the city and the municipal government to try and make a more fair and equitable financial system for people in San Francisco. So we started with programs like Bank on San Francisco, which was access to banking for everybody. So the idea that everyone should be able to have a safe and affordable place to keep their money and to save their money. So that was a program we worked on there. And then we went on to launch the country's first universal children's savings program. So today, every single kindergartner, actually today every single elementary school student in San Francisco has a savings account open for them by the city and county to encourage families to save early and often for college. So when we think about financial empowerment and how local government plays a role, we're really looking at a couple of things. So do you have the ability to have a safe place to keep your money and deposit your paycheck, pay your bills in a way that's affordable, that doesn't have high fees and it's transparent? So that's the first thing. Do you have access to financial education and coaching if you need it? So the city now has quite a robust individual financial coaching and counseling program that they run. Are you able to save and invest in your future? So save for college, save for home ownership, save for those big things, be a small business owner. And then the fourth thing is, are your assets protected? So are we protecting you from predatory practices that can deplete your wealth? And why did you decide to go from the city, from a public organization to a more private organization like SaverLife? You know, it was an interesting story. So we had worked with SaverLife when it was known as OWN at the city. So the organization was actually really closely partnered with us. So I knew them and I knew their work. So there was a couple of reasons. I became really intrigued by this idea that being here in Silicon Valley, we really should start putting the types of technology that are so transformative, really putting that to work for everybody, right? And I had been an advisor on an advisory board to a for-profit fintech startup and I thought, oh, if we could take that type of tech and use it to help low-income people build wealth in the U.S., that could be really transformative. So that was the first reason. The second reason was really thinking about the scope of this problem. And when you work for the local government, you see that trajectory, that the traffic ticket that turned into a lost driver's license that turned into a lost job that turned into an eviction. Right? Like you see those types of issues play out over and over in people's lives. So the idea that half of America doesn't have 400, 500 bucks and we could actually do something about that was really impactful to me. And then the third reason was, you know, I loved working for the San Francisco Treasurer, who's amazing, but I kind of felt as a woman that I wanted to lead an organization in my own right. And that I had challenged myself that I had a personal goal, that if the opportunity came up to be that leader, that I was going to challenge myself to take it. And so when the opportunity came up, I just went for it. And what challenges did you face to become the CEO? You know, I think a lot of the challenges first were, you know, within myself, you know, like, there's a lot that goes into being a nonprofit CEO. You know, you have, obviously you're working on some of the biggest problems that are out there and you're doing it with so few resources, you know. And so is that kind of, you know, that saying about Ginger Rogers doing everything that Fred Astaire did, but backwards and in heels is kind of like that, right? You're trying to solve really, really, really big problems that are deeply entrenched, like half of America doesn't have 400 bucks. There's a lot of reasons for that, right? And then you're trying to do it by cobbling together philanthropic resources to make that happen. So I think that was a challenge, like would it be a success? And then at the time this organization was making in the midst of this massive transformation, you know. So going from seeing clients one-on-one in the office to launching and building a scalable tech platform. And I don't have a tech background, you know. I can sometimes use my phone, you know, like that's like it's not, it's not my thing. But I was able to understand the potential. And so that was what really drew me there to challenge myself to be like, okay, well, there's a lot of people around here that have managed to figure this out. Maybe I can figure it out too. Yeah, absolutely. So when we talk about people being unbanked, can you tell us more about what unbanked means and what it means for today? Yeah, so when we talk about access to banking and mainstream financial services, so we usually separate that into two buckets, right? So you have unbanked, which means people who have no formal relationship with a bank or credit union. So you don't have a checking account, you don't have a savings account, you're going to a check cashing place, you're paying a fee, quite a high fee to turn your paycheck or whatever into cash. You're paying your bills with money orders, you know, that kind of thing. Then there's a larger category of people that are called underbanked. And so those are people who may have that checking account relationship with a bank or a credit union, but they're still using these types of alternative services. So that could be money orders, it could be high cost predatory paid lending, also title lending, like these kind of systems that are outside of mainstream finance. And that actually affects quite a lot of people here in the U.S., about, I think, seven to eight percent of people are completely unbanked, but a much more significant portion are considered underbanked. And I think there are a lot of reasons for that. It's usually split about 50-50 between people who have never had an account before. So those may be people who don't think banks are for them, don't feel welcome in that environment, don't trust banks, you know, so those are some of the reasons. But then the other half of people who are unbanked is because they've had bad and negative experience with banking and that they've made a decision that banking didn't work for them. It was too costly, often, that's the reason. Hidden fees, overdraft fees, those types of penalties, and just decided that, you know what, it was better for me to be able to manage my money in a different way. And how has SavorLife helped these people feel more secure in their financial investment? So when we first launched SavorLife, it's gone through so much transformation and change over the years because we've been really adopting some of those tech-based best practices around iteration and being user-driven and really trying to deliver something that will work for people. So what we heard when we first launched was, you know, I know that saving is something I need to do for myself and my family. I think pretty much everybody knows and understands that, but it's too hard for me right now. You know, either I've lost my job, I've been, I've had an illness or a family member's had an illness. There's a lot of real reasons why people are unable to do that. And so people would say, but I really want to get there. So what can you do to help me? So at SavorLife specifically, we work with large numbers of people. We have about a quarter of a million people who've signed up for SavorLife in the last three years, which is really cool. We went from serving 10,000 people in a decade, actually 6,000 people in a decade, to 250,000 people in three years, which is pretty cool. So that shows us that there's a big need and interest for this. So anyone that goes to SavorLife.org and signs up is going to get weekly financial coaching content from a certified financial coach who specializes in helping people with lower incomes to build wealth. If you link your account to our platform, you're going to qualify to win prizes for saving your own money. So it's kind of like this no lose lottery in a way, like you gain because you're saving and you have the opportunity to win money and it's completely free. So there's a lot of real benefits that we have on the platform that are designed specifically to help people who are struggling financially. Well, that's awesome. Lee, thank you so much for being on theCUBE and thank you for your insight. Thanks so much for having me. I enjoyed speaking with you. I'm Sonia Tegare. Thank you for watching this CUBE conversation. See you next time.