Timothy Flacke, executive director of "Doorways to Dreams" or D2D Fund, says there are two categories that block savings.
First is simply access.
"If you don't have a savings tool, you are not going to save," he says.
Second, savings is considered a form of self-denial or self-sacrifice. It just isn't fun.
"People have a tendency to look at savings the same way they look at dieting," Flacke says. "They do not look forward to it."
One way D2D has worked on the fun aspect of savings is to look at prize-linked savings. The more money people save, the more chances they have to win prizes.
Similar programs have been operated in the United Kingdom and other countries for decades with success, he says.
D2D's save to win program has worked with credit unions in Michigan and other states (Rhode Island, Nebraska, Washington, North Carolina and Maine) are in the process of implementing similar savings programs. The difference between the program and a lottery is in the save to win program, people keep their money. The difference between the account and a regular credit union or bank savings account is the interest rate is lower to pay for the possible prizes.
The whole point is to get people to save who otherwise would not save — and, Flacke says, it has had a broad appeal across socio-economic groups.
D2D has also worked on the access end of the savings problem. Flacke says every year billions of dollars come back to people through tax refunds and the earned income tax credit.
"This is a huge financial event in the lives of people who do not make a lot of money," he says. "This is the moment you want to make it easy to save money."
D2D is trying to educate people about the U.S. Savings Bond option on income tax forms where people can choose to get a part of their refund in inflation-protected savings bonds.
Unlike the U.S. Savings Bond program through banks, this method still gives people paper savings bonds — enabling people who do not even have a bank account to save.
A parent can also place a child's name on the bond. "This is powerful for a child to know that a parent is putting aside money for them in their own name," Flacke says.
D2D has other initiatives as well, such as online financial games and emergency gift cards.
Deciding to save
"You can beat people all you want, saying, 'You should save more,'" says Mitchell with the Cato Institute, "but if you don't have any incentive or reason to save because of the government, (it isn't going to work)."
And avoiding expensive dressing gowns may help as well.