Emergencies don’t have to be financial disasters; start saving now!

You’re laid off at work. Your car needs a new transmission. Your furnace blows. These are all costly emergencies that can’t usually be anticipated and cannot be avoided once they occur. Without a fund set aside just for such emergencies, they can trigger even greater disasters.

Last year, NeighborWorks America released the findings of its third annual consumer finance survey. Chief among them is the alarming fact that nearly a third of adult Americans (29 percent) have no emergency savings. Ninety-one percent of those with incomes of $100,000 reported holding emergency savings, compared to just 30 percent of who earn less than $20,000, 63 percent of those with incomes below $40,000 and 78 percent of those with incomes between $40,000 -$50,000.

There also were significant differences by race and education. The highest percentages of households without any emergency savings at all were reported by African-Americans, adults with lower incomes, and among those with a high school education or less.

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A good rule of thumb is to have enough funds set aside to cover three to six months (some say four to seven) of living expenses. This will give you enough time, for instance, to find a new job or supplement your unemployment benefits until you do. However, anything in the bank is better than nothing — and $500 will get you out of many scrapes that would otherwise put you in the hole. In other words, start small if you have to, but start.

Here are a few tips:

  • Set up a savings account just for this purpose. Separate it from the accounts you tap into on a regular basis so you’re not tempted to dip into your reserves. Do not get access to it via debit card. And if you are issued a checkbook, hide it.
  • Arrange the automatic deposit of a portion of your paycheck into that savings account. Most employers allow direct deposits into multiple accounts. This is the most painless way to create a regular savings habit; you won’t even notice it! But make sure you’ve created a realistic budget. Otherwise, you’ll be pulling money out of savings regularly to pay bills, defeating the purpose.
  • Keep the change.When you get $1 and $5 bills after breaking a $20, drop some in a jar at home. When the jar fills up, move it into your savings account. And if you have money left after paying your bills at the end of a pay period, move some into your emergency fund.
  • Save your tax refund. The average refund is in the thousands, which can give a good boost to your emergency savings. When you file your taxes, consider having your refund directly deposited into your emergency account. Alternatively, adjust your W-4 tax form so that you have less money withheld, and direct the extra into your emergency fund.
  • Cut back on costs.If you’re still falling short on saving, track your spending for a month to find discretionary expenses you don’t really need. Meals out, stops at coffee shops, drinks with friends all add up fast, but you may not realize how much you’re spending in total until you’ve put it on paper.

Remember: Expenses you should be able to anticipate, such as holiday gifts and annual auto insurance payments, are not emergencies! One of the most common problems people have with emergency funds is forgetting to plan for one-time expenses each year.

St. Ambrose is a member of the NeighborWorks America network of nonprofit housing and community-development organizations and we have staff that are trained and certified to offer financial education and coaching to help you follow these guidelines. Our financial coaches can help you realize your goals, encourage you along the way, and hold you accountable on your journey. Emergencies are upsetting enough. Don’t allow them to turn into financial catastrophes as well. If you’re interested in meeting with a financial coach, call us at 410-366-8550 ext. 235 or check our webpage: https://www.stambros.org/pages/financial-coaching.html

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Leslie and Rosalyn, proud graduates of our “Invest in Your Future” workshop series
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Financial Coaching Workshops come to North Barclay Green

North Barclay Green Community Center at 2001 N Barclay is a community space provided through Neighborhood Partners and Telesis and is open daily to connect neighbors to resources, provide programming for all ages and interests, and work to make Barclay a great neighborhood to call home.

St. Ambrose offered a one day financial education workshop in February at the center and was invited to host a four week financial coaching workshop series this spring. We sat down with the center’s community organizer Tarahn Harris to catch up on what’s going on at the North Barclay Green Center and to get his perspective on financial education in the neighborhood. Tarahn works with Ms. Lottie Snead to bring programming and resources to Barclay residents.

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So, how do financial coaching services contribute to the overall vision for moving the community forward?

Neighborhood Partners has 7 core values to support the neighborhood, one of those values is financial empowerment.

The workshops provide information that’s accessible that can help residents see new options for themselves and envision a different future. Neighborhood residents can see that even if they don’t have the job they want right now, they can still set goals- and that’s the impact and the importance of financial education for the neighborhood.

What was the response from neighborhood residents about the financial workshop?

There’s been a lot of good feedback, and I think community members are just grateful to be exposed to the information. The workshop is presented in a way that is super engaging, which makes it easier for the residents to embrace the information. What’s really great is that St. Ambrose is accessible to the community so that physical barrier is gone. It’s important to connect people to resources that they can walk to.

What impressed you about the Financial Education workshop this winter?

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Denitra Braham, St. Ambrose Financial Coach, answers a participant’s question at the February workshop

It’s refreshing to have the information presented in a way that is fun! There was such a wealth of information and the way it’s presented is accessible and engaging.The question and answer section was really helpful and participants at the workshop were made very comfortable, even with a subject that’s usually sensitive.

What other services are offered at the center and through its partners?

Community round tables about nutrition and diabetes, community gardening, help for returning citizens, job readiness support, youth programs like a bike club, Monday night cooking classes with a local chef… and more!

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With a background in social work, community organizing, and family counseling, Tarahn serves Barclay with a  breadth of knowledge on how to have a positive impact on other people. He’s hitting the pavement to make sure Barclay residents are connected to the resources they need- no matter how big or small. As Tarahn wisely noted, “Communities thrive through partnerships,” and we’re happy to have Tarahn and the crew at North Barclay Green to be out there connecting neighbors to resources and providing a great community space for the Barclay neighborhood.