46 NOVEMBER / DECEMBER 2020 Personal Finance for the Pandemic Era Why bankers should deliver fin ed lessons The pandemic has forced many lessons on us, not the least of which is the importance of being prepared. I don’t mean being-well-stocked-on-toilet-paper prepared. I mean having the ability and resources to survive an uncertain and even perilous period. For businesses, that clearly requires having a well-crafted and tested business continuity plan. For households, the most important preparedness tool may be a well-funded savings account. Those who may not have fully appreciated this before COVID-19 certainly understand it now. In fact, a Bank- rate survey this summer found that Americans’ top financial regret is not having enough emergency savings to withstand the crisis, followed closely by not having enough retirement savings. This presents an important opportunity for banks, which can and should help support both established and fledgling savers as they pursue their savings goals. Nothing is more fundamental to financial wellness than savings. Given the massive economic dislocation caused by the pandemic, this may seem an odd time to exhort others to save. Many are suffering from loss of income and find it challenging to pay their expenses. How can they possibly set aside money for a rainy day when it’s already pouring? But there’s reason to view this as the ultimate teachable moment, and an ideal time to convert lessons into action. In a July survey of hourly workers (by DailyPay and Funding Our Future), 51% reported that coming out of the pandemic they are more likely to save for the future, as opposed to 15% who said they were less likely to do so. Meanwhile 65% indicated they don’t have any type of savings account, and 62% said they would be able to save more if there were an easier way to set aside a portion of their paychecks. These data point to a clear demand for information and tools to facilitate savings. Banks are a reliable source for both. To help banks meet that demand – and prevent financial regrets in the first place by teaching financial fundamentals to today’s youth and young adults – the American Bankers Association Foundation has adapted its financial capability programming for today’s virtual world. Teach Children to Save lessons went virtual in April, and Get Smart About Credit has also been adjusted to include new resources and notes for delivering effective virtual presentations, as well as new modules around saving for the unexpected. We all know that strong personal finance skills are essential to success in life. In fact, a majority of respondents in the latest Charles Schwab Financial Literacy Survey reported that money management was the most important skill for children to learn, outranking the dangers of drugs and alcohol, healthy eating and exercise habits, and safe driving practices. And nine in 10 agreed that a lack of financial education contributes to some of the biggest social issues our country faces, including poverty, unemployment and wealth inequity. Which brings us to another lesson learned from the Robert S. Nichols President and CEO American Bankers Association nichols@aba.com @BankersPrez FEATURE
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