Elaine Thompson, Associated Press
A Check Masters payday lending storefront.

Sherry Williams thought she had her spending perfectly, if precariously, planned out.

Williams, who runs a child-care business, didn't want her kids to go without for the holidays, so she got a credit card at Toys"R"Us that gave her 10 percent off. She planned to pay off the card the very next month when her tax refund came. But then her car broke down. She had to use the tax return to fix the car, and then she couldn't pay down the credit card.

Something like a broken transmission, which might be an inconvenience for a middle-class family, can quickly become a crisis for low-income working moms like Williams. Like many among the working poor, Williams, whose last name has been changed to protect her privacy, didn’t have savings to fall back on.

“Many individuals in the U.S., especially those who are part of low- to moderate-income families, struggle to meet their expenses on a day-to-day basis,” according to a 2013 report from the Stanford Center on Poverty and Inequality.

A poll conducted by Oxfam America revealed that 66 percent of workers who make under $10 an hour either “just meet” or “don’t even have enough to meet” basic living expenses. For those struggling to get by, there is little money left for savings. Studies show that for individuals like Williams, this lack of savings can create both practical difficulties and psychological problems.

No money in the bank

Many Americans, not just the poor, struggle with saving money. More than half of American households have less than a month's worth of savings in case of a job loss or an emergency, the Pew Charitable Trusts reported in January. But low-income families, aside from having less money to sock into savings, are also much less likely to have access to financial services that many middle-class families take for granted. About 83 percent of people without bank accounts — over nine million Americans — are low-income, making less than $25,000 per year, according to a 2004 report from the Brookings Institution.

Several factors compound the financial situation of earners with low incomes, including their experience with the banking system. Many are wary of "hidden" fees, which can quickly bite into meager savings. In one study described in the Stanford report, 45 percent of people without bank accounts, or "unbanked" individuals, said they would join a bank if the fees were lower and more transparent.

In addition to the nine million Americans with no bank account, another 24 million households are "underbanked," according to 2013 FDIC data, meaning that they have an account, but don't qualify for bank loans, leaving them to rely on services outside of the banking system — including costly payday lenders.

Non-traditional, high-interest loan operations do a booming business. "There are more payday lenders in California than McDonald's and Starbucks combined," said Leigh Phillips, director of the San Francisco Office of Financial Empowerment, or SFOFE, a division of San Francisco's treasurer's office.

Payday loans can be an attractive short-term option for gaining quick access to cash. But high interest rates can translate into long-term debt, making it even more difficult for low-income families to save.

This situation can get even worse when borrowing from multiple payday loan outlets at the same time, Phillips added. One of SFOFE’s clients had, over the course of one year, taken out eight separate payday loans and was paying $720 a month in fees alone.

“What makes (low-income individuals’) financial lives even more tumultuous is that the financial services on which most low-income families routinely rely tend to set them back even further,” the Stanford report found. “This makes it unlikely that they will live a financially stable lifestyle or attain upward mobility.”

Trouble saving

When people cannot manage their money, they may experience financial distress. Academic studies suggest that debt and financial hardship can lead to psychological problems like anxiety. A study from the Economic Journal of Psychology showed that low financial capability can induce the same kinds of stress and reduced well-being that occur when facing unemployment or going through a divorce.

The January Pew report found that since the recession, many households remain financially insecure. Most families "feel vulnerable and stressed and could not withstand a serious financial emergency," according to the report.

Over 10.6 million Americans were among the “working poor” in 2012, according to a Bureau of Labor statistics report released earlier this year. The working poor are people who spent at least 27 weeks in the labor force either working or looking for work, but whose incomes still landed them below the official poverty level. The number had changed little from the year before.

These workers face both practical realities as well as psychological barriers when it comes to saving money. Mounting evidence shows that the strain of poverty can impair judgment; according to Harvard economist Sendhil Mullainathan, poverty can have an effect similar to pulling an all-nighter every night.

Some people lack the basic skills needed to get ahead. Beadsie Woo, who manages the Annie E. Casey Foundation’s work around asset building and financial services, described a financial coach’s work with a young man in Indiana who had transitioned from foster care and didn't have electricity in his apartment. "The coach talked him through how to go to the utility company and put down a deposit," said Woo.

Others don’t have incomes that allow them to plan ahead. In its report, Pew discovered that many families see their income fluctuate. In any given two-year period, nearly half of households experience a change in income of more than 25 percent. This unpredictability makes it hard for a family to build a financial cushion, the researchers said.

Even when people are able to crawl out of debt and begin saving, there is only so far their money can stretch. Saving a few hundred dollars might get you out of a crisis, but it won't get you closer to owning a home or paying for college.

Robin McKinney, co-founder of Maryland CASH Campaign in Baltimore, acknowledges that many of her clients deal with what she calls "structural deficits" — meaning that the structure of the U.S. economy is such that it can be hard for those with low incomes to make enough money to really get ahead. For example, a single parent with a full-time, minimum wage job doesn't make enough to pull a family out of poverty.

The emotional distress that comes from being in debt and poverty can create a negative cycle. Sherry Williams, whose car broke down, found herself using money to try to make up for things that her children didn’t have. "Every time I feel like I'm not a good mom, I try to spend my way out of it," Williams told McKinney.

"I asked her, 'How is that working for you?'" said McKinney. "Then we could talk about habits that would make her feel that she was there for her kids without debt. That's more powerful — getting to the root cause of the problem.”

Correction: June 19, 2015: An earlier version of this story misattributed a quote about one financial coach's work with a man in Indiana. The quote was from Beadsie Woo of the Annie E. Casey Foundation.