GreenState helps build savings habit
New accounts will make it automatic
Last year it was reported that 56 percent of Americans would not have enough money in savings to cover a $1,000 emergency expense. The likely result would be to cut other expenses or go into debt.
GreenState Credit Union recently launched a product to help combat this.
“We understand that it’s difficult to get into the habit of setting money aside,” said Jim Kelly, chief marketing officer for GreenState Credit Union. “So we built a product that automates the process and creates the habit for them.”
The Rainy-Day Savings Account was launched in December and members now have the option of using this service. Every time a deposit is made to their checking account, 2 percent of the amount is automatically moved over to the Rainy-Day Account where it earns interest. Over time the balances grow and a nest egg or “emergency fund” is established.
“The member can access their funds at any time with no fees, but what we see so far is that the funds remain in the account and grow,” said Kelly. “It’s the old “out-of-sight, out-of-mind” that makes this effective.
When the unexpected expense arrives, these members will not necessarily have to rearrange their budget or go into debt. They will be ready. It’s back to the basics of paying yourself first.”
In the short period that it has been offered, more than 500 members have opted for the account and balances have already grown to just over $500,000.
GreenState has a goal to help over 10,000 members build the habit of saving in the first year of the Rainy-Day Account.