Savings are as important as income: Low-income families with savings of $2,000 to $4,999 are more financially resilient than middle-income families without savings. (Photo: Shutterstock)

Everyone should have an emergency fund. Generating an income is necessary to meet your day-to-day expenses, but having an emergency fund is an asset — and it's critically important. It's a form of wealth—something that can help you navigate a financial setback, like an unexpected bill or the loss of a job.

Unfortunately, many people don't have one.

Earlier this year, GOBankingRates conducted a national survey that asked whether people had enough savings to cover three common types of financial emergencies: a car repair, a medical emergency, or six months' worth of living expenses if they lost their job. More than half of respondents answered no:

●     55% couldn't cover six months of living expenses

●     54% couldn't handle a medical emergency

●     42% would have to borrow money or sell something to pay for an unexpected car repair.

In fact, about half of respondents had less than $1,000 saved.

These numbers leave people financially vulnerable, so that relatively minor events like a parking ticket, jury duty, or time off from work to care for a sick family member can result in major consequences.

According to the Urban Institute, financially insecure households are 14 times more likely to be evicted, 3 times more likely to miss a housing payment, and 3 times more likely to miss a utility payment.

Even a small amount of non-retirement savings can make a huge difference. According to the same study, families with just $250 to $749 in savings are less likely to be evicted, miss a housing or utility payment, or receive public benefits.

In fact, their research has further shown that savings are as important as income: Low-income families with savings of $2,000 to $4,999 are more financially resilient than middle-income families without savings.

Now for the silver lining; it's never too late to start an emergency fund or to encourage plan participants to do so. A great option is to engage with EARN, a national nonprofit that exists to promote the power of saving. Founded in 2001, this award-winning organization creates prosperity for low-income families by helping them save and invest in their futures.

EARN works at the intersection of financial technology and financial inclusion to develop online programs that empower low-income Americans to take charge of their financial lives. EARN has partnered with other mission-driven organizations at the state and local level, and has received major funding from companies such as JP Morgan Chase, along with the MetLife Foundation and W.K. Kellogg Foundation.

EARN has created the SaverLife program to support working families in building the habit of saving. Currently open to partner organizations, SaverLife offers cash incentives combined with financial coaching, nudges, and games. Participants build financial knowledge, confidence and self-efficacy along with the habit of saving.

And it appears to be working. Despite an average annual income of $33,000, participants (Savers) save an average of $758 over six months, and are more likely to stick with a budget (75%) and save regularly (88%).

EARN uses both small and large cash incentives in creative ways to help motivate their program participants to save. A contest such as #WhatImSavingFor is designed to promote the inspiring stories within communities of savers by inviting participants to post a picture of their savings goal on social media, and in return, being entered into a weekly cash prize drawing.

Their successful SaverLife Tax Pledge campaign encouraged people to save a portion of their tax refunds by taking a pledge and consequently being entered into a drawing for a cash prize. The result:  9,000 new savers pledging to save over $2.4M in tax refunds.

Behavioral research supports the idea of using pledging as a way to strengthen motivation that can encourage future follow-through.

Multiple studies have found that 'pre-commitment' actions such as signing a public pledge make it more likely that people will actually do whatever it is that they have pledged to do.

Incorporating behavioral insights into financial wellness programs like this one can improve financial security for millions of Americans.

Having an adequate emergency fund means that people can then afford to save for retirement. Programs like EARN's SaverLife are innovative, based on research, and appear to be making a difference for participants. This holiday season, think about how you can help participants make a pledge to grow an emergency fund.

Dr. Martha Brown Menard is the Senior Researcher and data diva for Questis. She is a research scientist, financial wellness coach, and member of the Association for Financial Counseling and Planning Education. She is passionate about democratizing personalized financial guidance through scalable and configurable technology. Contact Questis to learn more about EARN.