By David Leon, NENA Director
Deputy Director Workforce Programs, Virginia Dept for Aging and Rehabilitative Services
As we usher in 2021, it is a great time to reach out to ticketholders you are working with to provide coaching and guidance around goal setting. Many of us spend time thinking through New Year’s resolutions and it is a great time to begin working on a new developing a new habit. Helping beneficiaries think through financial goals for the New Year is another step towards greater self-sufficiency. According to a December study by the FINRA Foundation, families with more than $100 in savings are better able to avoid high-cost borrowing such as predatory lending and payday loans, and keep utilities on, and they are more financially satisfied than those with less money in savings. According to the CFPB, over 80% of payday loans are followed by another payday loan within fourteen days and half are in a sequence of at least ten loans. Many borrowers end up paying more in fees and interest than the original loan amount. Saving $100.00 is a small goal that could have a large payoff in an emergency and create a new habit that will pay dividends in the future.
For people who do not earn a lot of money and have trouble saving, here are a few tips that can help build up even a small safety net. Starting small is a good way of developing a habit. Just get started, even if it is just $5.00 a paycheck. Setting aside a small amount in an emergency savings account is a great way to begin. Don’t let those financial “experts” discourage you from working on this just because the thought of saving three to six months of earnings is unfathomable. A smaller goal such as $100.00 is still beneficial and much more attainable. Remember the goal of savings is to have it for when you need it and it is important to celebrate rather than become pessimistic about the ability to reach the goal. Developing a savings plan also helps people stay on track and discussing this plan with your client will make it more likely that the individuals you work with will be successful. Automating saving may make this easier by setting up a payroll deduction, automatic transfer or using an app that will do some of the work for you.
Talk of another round of stimulus checks brings up one other way of jump-starting a savings plan. If you know your client will be getting a chunk of money such as a stimulus check or a tax return, you could provide counseling and guidance to develop a plan to save a portion of those funds. Starting a conversation around money may seem foreign but these discussions will build a stronger rapport and therapeutic alliance over time.
Wishing everyone a safe and happy New Year!