When the pandemic hit, a lot of people suddenly found themselves out of work and in need of savings to weather the storm. The trouble is that even before COVID-19, many Americans didn’t have much put away.
This highlights the importance of America Saves Week, Feb. 22-26. Once again, Nacha is pleased to support this annual initiative of the Consumer Federation of America.
If you’re a worker, ask your employer to earmark a percentage or dollar amount from your Direct Deposit to go to savings each payday. Even $20 automatically placed into savings bi-weekly means $520 saved before you know it. That money will be there when you need it, whether it’s that broken dishwasher or the unexpected doctor’s bill. If you don’t yet use Direct Deposit to get paid, then America Saves Week is the perfect time to sign up and begin saving.
Nacha also is encouraging banks and credit unions to participate in America Saves Week. To do that, we have several materials available to you, free of charge, to get the message out about the importance of saving. There are ready-to-go items, including social media posts and graphics, and you can add your own logo and other details. You can download them from the Nacha website.
While the pandemic was an unusual event, the need to get Americans to save more is perennial.
The Federal Reserve’s “Report on the Economic Well-Being of U.S. Households” annually asks people how they’d handle an unexpected $400 expense, such as a car repair bill. When the Fed posed the question in October 2019 for its 2020 report, 63% of adults said they could cover it exclusively using cash, savings, or a credit card they’d pay off in full at the next bill.
While that was up 2% from a year earlier, it still leaves 37% who might not find that $400 surprise so easy to deal with. The report found “the most common approach was to pay for the expense using a credit card and then carry a balance,” adding that 12% said “they would be unable to pay the expense by any means.”
Saving has always been important, but COVID-19 has shown that major surprises can occur. That’s not the time to be caught short. Saving automatically through Split Deposit can go a long way to help ensure that doesn’t happen.