UT Extension Encourages Families to Save and Discover Healthy Financial Habits
KNOXVILLE, Tenn. – The COVID-19 pandemic has created a money crunch for many Tennessee families. Reduced work hours, furloughs and unemployment threaten financial livelihoods, forcing families to reevaluate normal habits of earning, spending and saving. University of Tennessee Extension is partnering with America Saves to highlight healthy financial habits and encourage Tennessee families to save automatically, save for the unexpected, save to retire, save by reducing debt and save as a family.
“The financially fragile state of many Tennessee families before the pandemic has been further exasperated by the current economic climate,” says Christopher T. Sneed, assistant professor in the Department of Family and Consumer Sciences. “According to data from United Way of Tennessee, when COVID-19 hit, more than 800,000 Tennessee households were already one emergency away from a financial crisis.”
Sneed adds that healthy savings habits can lessen the impacts of an economic crisis like this one. “For families dealing with job loss or reduced income, it’s the proverbial ‘rainy day,’ and they are struggling to navigate child care needs, housing costs or locate adequate food resources. But, whenever Tennessee families see their income restored, evaluating saving plans and spending habits can help them be better prepared in case of future job loss or other unexpected events.”
Sneed and other UT Extension personnel are partnering with America Saves for the 2021 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. The week encourages a “gut-check” on their finances and saving behaviors and provides a framework that helps savers set goals and make plans to achieve better financial stability. This year’s event is scheduled for February 22-26.
Each day during the week has a different financial focus. To participate online, visit americasavesweek.org and sign up for updates.
Monday, February 22: Save Automatically
The easiest way to save is to save automatically. To save a portion of your income without thinking about it, contact your bank or credit union and follow steps to setup automatic transfers from your checking account to a savings account. Start with $10 a week and increase it each month. If your employer offers direct deposit, utilizing split deposit is another way to save automatically.
Tuesday, February 23: Save for the Unexpected
A flat tire, a broken arm, an emergency household repair. These are all examples of the unexpected that can happen when we least expect it. Are you one of the 800,000 Tennessee households that are one emergency away from financial crisis? If so, set savings goals to change that and be prepared for life’s sometimes unpleasant surprises. Having an emergency fund to support unaccounted for needs is a top priority on the way to financial health.
Wednesday, February 24: Save to Retire
Very few Americans have a plan for retirement savings that will cover their desired lifestyle, but it’s never too late or too early to start saving. Take advantage of employer matches and designate a portion of your pre-tax income to funds like 401(k)s or individual retirement accounts.
Thursday, Februrary 25: Save by Reducing Debt
Actively reducing debt means saving on interest, avoiding late fees and maintaining or increasing your credit score. Paying down debt is a form of saving and another component of a healthy financial plan. Two possible strategies to reducing debt are the snowball method (paying the smallest debts first) and the avalanche method (paying the debts with the highest interest rates first).
Friday, February 26: Save as a Family
Learning good money and savings habits at a young age can lay the foundation for a lifetime of financial success and smart choices. Modeling a positive relationship with money to children and teens can help them build their own good habits. Parents, aunts, uncles, grandparents, teachers, club leaders and others can all play a part in the next generation’s financial success. For more resources for saving, debt reduction and money management, visit fcs.tennessee.edu/money or contact your county Extension office.
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