You don’t have to look far to find proof that many Americans aren’t saving enough. And we’re not even talking about retirement. What if the car’s transmission dies? What if the refrigerator is toast?
For too many Americans, the respective answers are likely “take the bus” and “I don’t know.” Because the fact of the matter is that a lot of us aren’t putting away at least a few bucks. And that’s why Nacha is once again joining with the Consumer Federation of America to help change things during 2020’s America Saves Week.
We have details on how you can get involved, but first let’s look at how troubling the situation is. In May 2019, the Federal Reserve issued its “Report on the Economic Well-Being of U.S. Households in 2018,” and it didn’t mince words.
“Results from the survey indicate that many adults are not well prepared to withstand even small financial disruptions, though the ability to pay current bills and to handle unexpected expenses has improved markedly since 2013,” said the report. “Despite the positive trends, financial challenges remain, especially for those with less education and for minorities.”
The Fed found that when faced with a hypothetical $400 expense, 61% of those questioned said they would use savings, cash or a credit card paid off at the next statement.
However, the other 39% remain a source of concern. Their most common solutions are carrying a balance on a credit card, or borrowing from friends and family. And 12% flat out said they wouldn’t be able to cover the expense.
A Bankrate poll conducted in May 2019 asked how many months of expenses could be covered by what people have in their checking, savings or money market. The biggest answer: 28% said none, followed by 25% who said fewer than three months. Just 18% said six months or more.
How do we end the drought affecting so many rainy day funds?
By making it rain every payday.
Most Americans already receive their salary by Direct Deposit. But there’s no law that says every penny has to go into checking. Quite the opposite.
Split Deposit is just what it sounds like: You split your pay among different accounts. So if you want most to go into checking and $10 to go into savings, no problem. Want 80% in checking, 15% in a money market and 5% in savings? You got it!
And because it’s Direct Deposit, everything’s done automatically, each and every payday.
“One of the many advantages of Split Deposit is how easy it is. It puts saving on autopilot,” said Jane Larimer, Nacha President and CEO. “Everyone needs to have a nest egg, and Split Deposit helps make it happen. Even just a few dollars at a time adds up.”
America Saves Week is Feb. 24-29, 2020. Each day has a theme and Monday’s is Save Automatically. Nacha is encouraging everyone to spread the word about Split Deposit.
We’ve created resources for you to share with your employees, customers, members—anyone who can help share the message, and, most importantly, anyone who needs to hear the message.
Nacha’s Split Deposit Toolkit has resources including graphics and social media posts. Artwork is available with Nacha branding as well as white labeled so that you can add your own branding. All materials are free to download and use. And we encourage you to use them. Because it’s time to get all Americans into the savings habit.
To learn more about America Saves Week, visit their website.