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A Thriving Underground Money Culture

by U.S. Financial Diaries

Boston College's Center for Retirement Research, one of the nation’s leading center on retirement studies, recently reported on the findings of USFD's work on informal finance.  CRR highlighted the various types of informal financial arrangements (money guards, savings groups, saving at home, and interpersonal loans) and dug deeper into the inner workings of savings groups in particular:

Savings groups require cooperation in delicate situations. Members who miss contributions may forfeit what they already put in.  But members also cover for each other. Sometimes participants unable to make a timely contribution can renegotiate where they fall in the withdrawal queue. When one Columbian [sic] immigrant and restaurant worker profiled could not make her $200 weekly payment, her sister did.

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