“It’s your pace, your goals,” said Ms. Dillon.
Here are some questions and answers about savings in the workplace:
How much should I set aside for emergency savings?
The latest research suggests that, especially for low- and middle-income workers, setting modest goals – say, $ 500 or a few weeks to go – is more realistic than striving for the traditional three to six months of pay-out-of-pay what to pay can be daunting. Recent research from the Urban Institute suggests that a reserve of just $ 250 could help families stave off high-yield debt and even evictions.
The idea is not to put a sum aside and leave it. Rather, the goal is to have a pillow that can be pulled on when needed and then refilled repeatedly over time. A car may need to be repaired so that the money can be used on the repair and then gradually replaced.
“The goal of emergency savings is to use them when they are needed,” said Leigh Phillips, chief executive officer of SaverLife. “It balances the cash flow.”
People often think of emergency saving as something that can be used in a “break the glass” crisis that would deplete the balance, Flacke said. More often, however, the money can surprise workers with smaller, recurring financial challenges.
“It’s more like a shock absorber,” he said.
Do I need to have a bank account to participate in emergency savings programs?
Many workplace austerity programs use traditional bank accounts, but payroll cards, which are often used to pay retail and other hourly workers, seem promising, said Catherine S. Harvey, a senior policy advisor at the AARP Public Policy Institute.
An amount earmarked for savings can be deposited into a card that makes it easy to pay for unexpected expenses as they arise. (Separate cards could be used for savings, and even employers who do not use the cards to pay employees could issue them as savings cards.) Many workers say they want readily available savings when needed, and the card meets those criteria, Ms. Harvey said.