From Chris Wardrip, CEO at Financial Health Federal Credit Union:
It’s no secret that the current state of American’s and emergency savings is not good. American’s today have a hard time coming up with the funds to cover an everyday emergency, such as a car repair, medical bill, etc. As financial institutions, we have the opportunity to provide tools and resources to help members to better prepare for unforeseen expenses.
When I first came to Financial Health Federal Credit Union, about 21 years ago, we were a struggling little credit union trying to compete with banks and large credit unions for the same customers and we were not doing that very well. We lacked the expertise, the marketing budget, the branch structure – all of that. We consciously decided to focus our attention on people most banks and credit unions do not want to serve; people who are typically taken advantage of by payday lenders, buy here/pay here car lots, etc. Over the years we have gotten increasingly passionate about that mission.
One of our main areas of focus is helping members who are having trouble setting up an emergency fund. According to a Federal Reserve Survey, about 46 percent of Americans said they did not have enough money to cover a $400 emergency expense. We want to help, which is why we have offered an emergency fund account for a few years now.
There are different concepts for how much money a person should have in their emergency fund. Our concept is that it should be at least one month’s worth of expenses. We offer members planning tools to help them estimate how much they should have in their emergency fund, and then help them determine how much they should save every month or every payday to build that emergency fund. Since we started the emergency fund accounts, members have opened 324 of these accounts and balances are $66,500, an average of $205 per account.
We find other ways at our credit union to emphasize the importance of emergency savings. At our annual meeting 2 years ago, we did an Emergency Fund Fair using this planning tool (click planning tools above). We had a table for each expense category and employees interacted with members to help them determine what their expenses were in each category, and providing helpful tips about managing their expenses in those categories. The format was similar to that of of the Foundation’s “Retire on Track” experiential learning fair (which, by the way, we are offering to central Indiana credit union employees in August as an event for the central Indiana chapter of credit unions).
Speaking of retirement, we also know how important it is for members to be educated about planning and saving for retirement. We offer a few tools to assist members, such as a Retirement Planning Quiz, and a Retirement Fund Estimator. Free resources such as these can really help a member assess where they are currently at, where they want to be, and our credit union can help them get there.
We try to engage in many financial health activities to promote financial wellness to our members, such as operating a VITA site and doing 897 tax returns in 2016. We also did an Interactive Car Buying Workshop at last year’s Annual Meeting (similar multi-table format) and have offered savings challenges for members. We have many resources and tools for our members on our website to help them with their financial wellness, which can be seen here.
I would be happy to provide any additional information about our programs, tools, and resources to anyone who is interested. I can be contacted by email at [email protected].