Spent: Looking for Change, a documentary film that was created by a collaboration between American Express and Academy Award-winning filmmaker Davis Guggenheim (An Inconvenient Truth, Waiting for “Superman”), tells the stories about everyday hardworking Americans that are struggling with basic financial challenges.
Every single day, there are many who have to turn to pawn shops, check cashing services, title loans, and payday loans just to meet basic financial needs. Every month, the sense of failure is overwhelming, as the bills pile up and the resources run out. For a growing number of Americans, the price of getting ahead in life is too high because when there’s an option of either paying off the loan or paying a fee to get it extended, most will inevitably choose the extension because the fee is more affordable. In fact, 80% of borrowers are forced to renew their loans after only two weeks.
It’s definitely time for big changes. New technology, new ideas, and simply encouraging honest dialogue around this issue can offer hope. It can also help make managing money simple and more affordable to everyone. This in turn will improve financial inclusion in the United States and present more options to the millions who are currently financially underserved. Underserved Americans spend the same amount of money on fees and interests as the typical American family spends on groceries. That amounts to $89 billion per year.
In order to avoid banking fees like overdraft, some families are choosing to live only on cash, but being unbanked has many disadvantages because you end up paying for services that people who are in the banking system get for free. Take for instance the amount of gas it takes to have to drive all over town to pay bills. Also, as money becomes more digitalized fewer places accept cash. This makes life more expensive for the underserved and it keeps them from getting ahead.
Nearly half of all U.S households live paycheck to paycheck and could not come up with $2,000 in an emergency. What happens when a family runs out of options? Where can they turn to for help?
Regardless of how despairing the situation may seem, there’s reason for hope. A new generation is using technology and innovation to change the way we bank and in so doing they are opening doors for the millions of financially underserved to be included. Making the system work better is within our reach.