The Consumer Financial Protection Bureau (CFPB) announced a new “Start Small, Save Up” initiative this week, in order to try and better prepare Americans for the endurance of unexpected expenses via an emergency fund, as well as the necessity of saving money for the future.
The initiative, “offers tips, tools and information to help consumers build a basic savings cushion and saving habit, as a foundation for securing their financial futures,” according to the announcement press release.
“Our research finds that even small amounts of liquid savings can make a big difference,” said CFPB director Kathleen L. Kraninger about the new initiative in its press release. “Unfortunately, 40 percent of Americans could not cover even a $400 emergency expense out of their own liquid savings. Many national organizations are working to help people to build a foundation of basic savings and we are proud to join with them and support this effort.”
The initiative’s presence on the web offers several tips to accomplish a sufficient savings cushion. Among the tips listed under the ‘start small’ section, for instance, is creating an individualized savings rule that could transfer as little as $5-10 per week to a dedicated savings account. A tip on planning for unexpected expenses echoes Kraninger’s comment, offering a target of $400 as a good place to begin an emergency savings fund.
In terms of planning for the future, the CFPB primarily recommends automating savings activity so that it becomes a natural occurrence at regular intervals. They also recommend the possibility of instructing an employer to make an automatic deposit into a savings account with every paycheck, for those businesses who pay their workers via direct deposit.
Find more details and tips at the program’s dedicated page at the CFPB website.