American Consumer Credit Counseling (ACCC) offers advice for World Savings Day on building emergency savings for unexpected expenses
Boston, MA – October 28, 2022
Monday is Halloween, and there is plenty happening in the U.S. economy to spook consumers about their financial health and readiness. October 31 is also World Savings Day – an opportunity for households to check their budget and expenses and find ways to stash a few dollars each week into a cash reserve.
American Consumer Credit Counseling (ACCC) is advising its clients – and all those who are focused on saving more money – about strategies and best practices for building an emergency fund or cash reserve.
A recent Financial Health Index analysis of household financial health and readiness by ACCC indicated that nearly 40 percent of consumers polled could not put any money at all into savings in Q2. The Q1 Financial Health Index survey found that 39 percent of respondents were impacted in some way by the rising cost of necessities on their family’s lifestyle. In June, the percentage of respondents impacted rose to 48 percent.
“The past couple of years have been filled with catastrophic events that have severely impacted Americans’ finances,” said Allen Amadin, President and CEO of American Consumer Credit Counseling. “The skyrocketing cost of household necessities and spike in interest rates can make it very difficult for a family trying to make ends meet. Although saving is very hard under these circumstances, it is especially important to have a reasonable cash reserve. Going into debt for an unexpected expense right now is not a good option.”
According to a 2021 report from the Federal Reserve, about 35 percent of adults were unable to pay for an emergency cost of $400 or more without using some form of credit. Here are some saving tips that can help consumers build up emergency savings to avoid unnecessary consumer debt:
Start small: After a careful analysis of your budget, set a realistic amount to put aside – even just $10 a week. It may not seem like enough, but little by little your reserve fund will grow. Be sure to add this as an expense to your budget.
Reduce spending: Revisiting bank statements to identify expenses that can be cut back is a good first step. Common expenses that can be cut back include gym memberships, dining out a lot, premium cable and streaming services, and unnecessary purchases.
Generate cash: Selling household items or clothes that you no longer use, or need is a quick way to earn cash that can go directly to your savings. If getting a second job is possible, that is another way to put more towards savings. The growth of the gig economy has produced a broad range of opportunities for people to earn extra money.
In several cases putting money aside to save may seem like taking away from other financial matters. Nevertheless, with consistency regardless of the sum one may be putting towards the cash reserve, consumers will see the value and benefits of having emergency savings.
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