This September, the Consumer Financial Protection Bureau (CFPB) is joining FEMA for National Preparedness Month. Together, they will highlight the importance of emergency savings and financial preparedness.
Savings is critical to your financial well-being. A lack of short-term savings can cause financial stress. It can also result in significant financial hardship when the unexpected happens. People generally don’t expect medical emergencies, natural disasters, or an expensive car or home repair. But these things can happen at any time. Having an emergency fund allows you to better withstand a financial shock.
In February 2019, the CFPB launched the Start Small, Save Up initiative to increase awareness of the importance of saving. But it doesn’t stop there. It also provides consumers with tips on how to save for emergencies and plan for long-term financial goals.
Start Small, Save Up highlights three strategies to reach these goals. They are:
Plan for the Unexpected: Having money set aside for the unexpected can save you money in the long run. You won’t have to rely on credit cards or other types of loans. Get started by finding a place for your savings and making a savings plan.
Save Automatically and Plan for the Future: Make it automatic—ask your employer if you can split your paycheck so some of it goes automatically to a savings account. You can also have your bank or credit union move money from checking to savings on a regular basis.
The CFPB is developing more tools and resources for consumers who are at different parts of their savings journey. In August 2019, the CFPB released two new resources. They are designed to help people get started with savings:
- “Building your savings? Start with small goals” is the fourth and newest addition to the Your Money, Your Goals suite of financial empowerment tools. The booklet can be used in conjunction with one-on-one financial counseling or coaching. This is available through a case manager or other service provider. It can also be used individually.
- The CFPB Savings Boot Camp is a multi-week email course. It is built to help people set and reach their financial goals. This will help them prepare for expected and unexpected emergencies. The email course provides step-by-step worksheets and tools designed to make saving clear and simple.
To learn more about the Start Small, Save Up campaign and the CFPB’s savings tools and resources visit www.consumerfinance.gov/save.
This article first appeared in the monthly Individual and Community Preparedness Newsletter. Subscribe here.