America Saves Week – Save For The UnexpectedThe Securities Division is proud to announce our support of America Saves Week!
Through the support of thousands of participating organizations, including our division, this movement is used to encourage individuals to do a financial check-in that allows them to get a clear view of their finances, set savings goals, and create a plan to achieve them.
This week’s focus on saving will highlight the following strategies:
- Monday, February 21, 2022 | Save Automatically
- Tuesday, February 22, 2022 | Save For The Unexpected
- Wednesday, February 23, 2022 | Save For Retirement
- Thursday, February 24, 2022 | Save By Reducing Debt
- Friday, February 25, 2022 | Save as a Family
Keep reading for our blog that explores how to ‘Save for the Unexpected,’ and remember to check back in throughout the week as we review each daily theme.
How to Save for the Unexpected
Everyone can agree that having emergency savings is ideal, right? Personal finance experts often stress the importance of having three to six months of living expenses put aside for emergencies or a “rainy day.”
When you’re living paycheck to paycheck or struggling financially, the concept of saving a large amount seems impossible. Add to that the reasons often as examples to save are usually negative — your car breaks down, you lose your income, an appliance needs to be replaced, or there’s a medical emergency — and it’s hard to stay motivated.
But here’s something not discussed as often: Saving for the unexpected enables you to take advantage of OPPORTUNITY.
Let’s say that you have been saving $20 every paycheck for the past year. A friend calls you to share that they just got a promotion and would love to celebrate with a dinner at a nearby restaurant. You’re excited for your friend and want to go, and because you have money in your savings, you can pull $50 out to attend. Because you chose to save, you could participate in that unexpected opportunity!
If saving for an emergency has been a struggle for you, consider reframing the action from “saving for emergencies” to “saving for opportunities?”
Whether you’re saving for emergencies, opportunities, or (hopefully) both, the easiest and most effective way to save is automatic. Saving automatically [hyperlink to Monday’s ‘Save Automatically’ blog] allows you to “set it and forget it.”
We’ve all heard the mantra to pay yourself first. You can do this easily by setting up split deposit with your employer, directing a portion of your paycheck into savings. If direct deposit isn’t available through your employer (perhaps you’re an independent contractor or freelancer), you can save automatically by having your financial institution set up an automatic transfer from checking to savings. No matter how you choose to save automatically, the most important thing is building the habit of saving.
If you’re ready to start your savings journey but not sure where to begin, check out “7 Steps to Jumpstart Your Savings Journey.” Then, take the America Saves Pledge. Let us be your savings accountability partner by sending you tips, tools, and resources to help encourage you to stay on track.
And for additional information on this topic, check out our video on this theme!
Rachel Carden serves as the Director of Investor Education for the Securities Division of the Tennessee Department of Commerce and Insurance.