American Consumer Credit Counseling helps consumers with simple but effective strategies for savings
Boston, MA – August 30, 2021
The pandemic reinforced the importance of saving and building an emergency fund. An unexpected crisis, like the COVID-19 pandemic, can place an entire household’s financial health at risk. National nonprofit American Consumer Credit Counseling, Inc (ACCC) says consumers should learn effective ways to build savings, especially for an emergency.
“Americans with every kind of financial profile have experienced an unprecedented event with the pandemic and its lingering economic impact,” said Allen Amadin, President and CEO of American Consumer Credit Counseling. “Now is the time to focus on building, or rebuilding, savings to ensure there is a cushion to fall back on if needed.”
Consumers need to consider building their savings now. A study by Oxford Economics says that the U.S. rapidly added almost $4 trillion to its savings during the COVID-19 pandemic. However, most of this money went to the wealthiest people in the U.S., and about 60 percent of Americans had to tap into their savings to navigate the financial burden.
Saving money requires discipline and making sacrifices. Consumers use their savings to accumulate enough for retirement, build generational wealth, or have an emergency fund. An emergency fund can be difficult to maintain, as it is too often tapped for non-emergency expenses. According to Discover Financial, saving is important because it gives consumers freedom. When an unexpected expense comes their way, consumers can cover it without the fear of going into debt. In addition, saving gives financial security and allows consumers to take calculated risks.
An effective and disciplined household budget is key when it comes to increasing savings. A budget gives consumers a clear picture of their finances by helping them monitor their income and spending overtime. One easy way to create and track a budget is by utilizing ACCC’s Household Budgeting Worksheet. According to many personal finance experts, consumers should aim to save 10 to 15 percent of their income. The most important lesson a consumer can learn when budgeting is the difference between a ‘need’ and a ‘want’. Understanding that needs are what consumers need to survive and that wants are desires that can make it easier when deciding what can be cut back to save more.
Cutting costs around your household can be as simple as shaving a few dollars in different parts of your life each day, and it frees up money each month for savings. The power of accumulation over time can add up to a substantial amount – even if each cost cutting measure looks tiny on its own. These measures can include:
- Unplug electrical devices when not in use.
- Cooking at home instead of eating out will reduce expenses, as well as cooking in bulk and freezing to take to work or school. The pandemic forced more people to cook more often, so the habit may be easier to adopt.
- Buy off-brand or store brand products at grocery stores, as they tend to be the same as the name brand.
- Consider canceling gym memberships – especially if they are rarely used. There are plenty of ways to exercise at home or outdoors, and many free or inexpensive programs available online or thru phone apps.
- Re-evaluate subscriptions and monthly memberships to streaming and other services. With each subscription, ask yourself if you really need it.
- Never shop without a list. Shopping with a grocery list helps you stay on track and avoid purchasing anything unnecessary.
- Carpooling with neighbors or co-workers to work can cut down significantly on the cost of gas and parking.
“The COVID-19 virus and its disruption of our economic life may linger for a long time,” said Katie Ross, Executive Vice President at ACCC. “Americans can and should take steps now to be prepared if the situation worsens before it gets better.”
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling, and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit http://www.consumercredit.com/financial-education.aspx