Coming Up Short: Family Composition, Income, and Household Savings

Abstract

Objective: Existing research on savings and liquid-asset accumulation is largely quantitative and focuses on descriptions of how income inequality leads to the ability or inability to save. What has been left out of this body of research is an in-depth exploration of the role family composition may play in the way that households accumulate liquid assets. The purpose of this research is to understand how lower and higher income single- and two-parent families characterize reasons for saving, obstacles to saving, and strategies to save. Method: A diverse sample of 42 parents of kindergarteners were asked questions about household saving at 2 time points. Results: Compared to other family types, lower income single mothers report little savings and aspirations toward very short-term savings horizons as a result of persistent income shortfalls. Unlike two-parent households, lower-income single mothers discussed their reasons for avoiding mainstream financial institutions and opting to use cash instead. Conclusions: To alleviate economic inequality and improve households’ ability to withstand financial volatility, social work practice and policy should consider implementing interventions that are responsive to the unique experiences of poverty by family composition.