A lot goes into the idea of how to call a company. The options variate from coming up with a word, Lyft, a wise description of the company mission, Weight Watchers, or repurposing a word, Amazon.
The initial name for Savings Jar was Project $400. The name came from the research that showed that a large part of the American population does not have $400 in cash in a case of emergency. Without a proper emergency fund, they have to resort to credit cards, pay-day loans, or borrow from a friend or relative when the crisis arrives. The issue with using a credit card or pay-day loan is the interest on the loan. The interest payment cost prevents building an emergency fund for the next time.
But we wanted to take this idea of saving further than just an emergency fund. This is about financial resilience and preparation. Then I came across the concept of a savings jar. Before the days of credit cards, families used to save in different jars. There was the vacation jar, emergency jar, and school jar. There was no vacation if the jar was empty.
Then credit cards arrived. The credit card allows people to buy without having the money right now. With a credit card, you can go on vacation regardless of the funds in the savings or checking accounts. This works out as long as you pay the credit card bill entirely and on time. The problem starts when you skip payments and accumulate debt. Now credit card companies can charge double-digit interest on the debt.
The pain does not stop with the direct cost of borrowing. Your credit score is affected by the ratio of debt to assets. Your credit score goes down when you accumulate debt. Resulting in higher borrowing costs for the future. Because of the credit score difference, a borrower with a low credit score will pay more for a house than a borrower with a great credit score. The result of debt and low credit score is a vicious cycle of paying more for the same services and products and having less to pay off debt.
Credit cards created another problem. It disconnected money from spending. If you pay for everything in cash, there is a constant reminder of your cash flow situation. You have to go every week to the ATM and pick up money and make sure you have enough cash for the purchase. Credit cards disconnected the relationship between spending and actual money. We can spend it regardless of what is in the bank or the wallet.
That is why we named the company Savings Jar. Going back to the days of the actual savings jar. Savings Jar's mission is to improve the lives of individuals, families, and communities by reducing financial stress and promoting financial resilience. Today you don't need to have an actual savings jar anymore. You can open a savings account for each goal and see your money grow from interest payments. We are not against fun. Our goal is to make sure people can pay for their fun without borrowing from the future.