Real-world stories help bring data to life

By Christine Wheatley

At Fidelity Labs, seeking consumers’ personal stories is at the core of how we solve problems.

We’re constantly exploring ways in which we might be able to help people deal with day-to-day financial issues, long before retirement. Seeking personal stories—and making sense of what’s underneath those stories—helps us do three things:

  1. Challenge commonly held beliefs about people’s financial issues
  2. Create a nuanced understanding of motivations and financial priorities
  3. Fuel ideation of new products and services that help better people’s financial lives

We think it’s vitally important to venture out of our office and meet with the people who we are trying to help, with the products we design. Recently we conducted a series of in-home interviews of working Americans. Here are a few things we learned…


It’s not always as it seems

It’s not just low-income Americans who struggle with day-to-day financial issues.

We were inspired to do this work, partly because of a Federal Reserve study finding that 47% of Americans would struggle to cope with a $400 emergency and would have to rely on credit, sell an asset, or borrow from a loved one to make ends meet. We questioned those stats—even those who are considered high-income Americans? We went to people’s homes, to speak with them at length, to get deeper insights with in-person interviews. These real-world stories help bring survey data to life.

Gathering personal stories also gave us an opportunity to understand their actual priorities, versus the prescribed priorities by others. When we asked people if it was a priority to have three to six months of their income on hand for an emergency—a generally accepted rule-of-thumb—they often laughed uncomfortably; to many, it’s a Sisyphean task.


Good retirement savers aren’t necessarily in control of their present-day financial picture.

The data we had gathered told us one story, but when we parted the curtain by having conversations directly with customers, we got to see clearly how many folks have difficulty managing their day-to-day finances. While some people are disciplined contributors to their retirement savings, they are also often struggling with cash-flow management, debt management, and other near-term financial conditions that create an alternate reality.


Making decisions based on emotions vs. facts.

When your heart is involved in everyday financial decisions—when you think it will impact your relationships, or the future of a loved one—it makes it hard to say “no,” even if you know you truly can’t afford it. We saw in our study how emotionally uncomfortable it can be to say “no” to certain types of expenses. This applied particularly to the parents we spoke to, who wanted to provide the best for their children, but were incurring significant short-term expenses while trying to do so.

Emotions also make it easy to say “yes” to spending money. There’s quick access to credit; yet terms of credit are often misunderstood. There are loans from friends and family, where terms are even murkier. There is also available borrowing from your future 401(k), which is considered a big “no-no” by many experts, as it incurs debt versus truly saving. With financial resources readily available to many, it makes it easier to say “yes” to things that aren’t a necessity.


Our study doesn’t end here

We will always explore how to help people establish priorities that are right for them, and strive to help them sustain those behaviors over time. We will continue to figure out ways to help people stay motivated and help them grow financially, by putting their money to work and, ultimately, give them the ability to increase their confidence in managing their finances.