In the past several years, research has exposed startling truths about the financial realities faced by low-income households in the United States. For the employed and unemployed alike, the lack of a savings cushion and limited access to affordable credit pose formidable barriers to achieving financial stability.

In fact, these barriers can be even worse for, employed people with low wages who must juggle volatile income and expenses amid busy work schedules. Recent studies have exposed the cognitive toll that the context of poverty takes on those of us with the fewest financial resources. While many people struggle to manage their finances, the individuals with the least amount of slack face the highest financial, mental, and psychological costs, with little room for error and high penalties for making any kind of mistake.

However, despite a flurry of ideas about how to create “financial wellness” programs, there has been relatively little progress in effectively delivering and testing these types of programs—or building evidence of their effectiveness.

Beginning in 2012 with support from the Ford Foundation and the Omidyar Network, ideas42 set out to use key principles from behavioral science to create and test a new financial product that addresses the unique needs of low- to moderate-income (LMI) employees. It was designed to streamline and automate key financial processes to meet a broad set of consumer needs through three linked accounts – a bill payment account with automatic payments, a discretionary spending account, and a savings account for building a cushion for future expenses. The insights from this work can help us begin to design better programs, products, and services for LMI employees.

Investment by both financial providers and employers in this area is likely to yield high returns. For financial providers, LMI employees represent an untapped market segment largely unserved by traditional banking models. Employers too have much to gain from reducing the effects of financial “scarcity,” which affect employee productivity, tardiness, absenteeism, and even turnover in the workplace.

This work provides a starting point for re-thinking how financial products and services are designed and delivered to LMI consumers. For more information, read our white paper Money, Stress, and Work: Improving Employee Financial Health with Behavioral Science and watch the video below.

Interested in developing a new financial product or learning more about this work? Reach out to us at financialstability@ideas42.org or tweet at @ideas42 to join the conversation.