SAVING FOR THE UNEXPECTED ISN’T JUST FOR EMERGENCIES
You can also save for OPPORTUNITIES.
Everyone can agree that having emergency savings is ideal, right? Personal finance experts have preached 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, struggling financially, and possibly not making a fair living wage, the concept of saving such a large amount seems impossible. Add to that the reasons often given to save are 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 positions you 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, would it be easier to reframe saving for emergencies to saving for opportunities? We think so and invite you to create your own “Opportunity Fund.”
Whether you’re saving for emergencies, opportunities, or (hopefully) both, the easiest and most effective way to save is automatic. Saving automatically 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 — there is no amount too small to save.
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 and choose emergency savings as a savings goal. Let us be your savings accountability partner by sending you tips, tools, and resources to help encourage you to stay on track.
Resources:
- Video: Save for the unexpected
- Download What-are-you-saving-for-asw-2022-resource-digital Use this worksheet to help you think through what opportunities you will save for this year.
About America Saves Week:
Since 2007 America Saves Week has been an annual celebration as well as a call to action for everyday Americans to commit to saving successfully and reducing debt. Thousands of participating organizations join together to encourage our local communities to prioritize checking in on their mindset, finances, and saving behaviors during the week. Individuals are also encouraged to take the America Saves pledge in order to clearly establish their financial goals and get information, resources, and support as they work toward them.
ABOUT THE PERSONAL INVESTMENT ENTERPRISE (PIE) PROGRAM
The Personal Investment Enterprise (PIE) program is a local savings program provided through Community Action Programs of Boulder County and Mile High United Way. The program is designed for low-income families to enroll in financial literacy classes and save through a matched saving account at a rate of 4 to 1. The first step in applying to the program is to attend an orientation meeting with Diana Sanchez at Community Action Programs at Boulder County. Diana may be reached at 303-441-3998 or at [email protected]. For more information on the PIE program visit https://www.bouldercounty.org/families/community-action-programs/personal-investment-enterprise/ or https://unitedwaydenver.org/personal-investment-enterprise-pie-program/. To see if you qualify, take this survey: https://www.surveymonkey.com/r/PrelimPIE.
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