Research demonstrates the link between financial shocks (e.g., job losses, decreases in income, child births) and entrances into poverty and hardship. The Consumer Financial Protection Bureau links shock-related expenses (like car or home repairs) and income disruptions (like job losses) to decreases in financial well-being.

AI and other technologies can help provide banking, savings, and other financial services to help prevent and cushion financial shocks, teach healthy financial habits, or provide planning, guidance, and advice. Public benefits and services provided by community-based organizations offer support to address food, housing stability, mental health, legal needs and more, and are critical in alleviating hardship and enabling people to make progress out of poverty. Potential solutions could include helping people navigate the safety net, access relevant resources, broaden knowledge about effective programs and policies, smooth financial disruptions, or strengthen existing services.