The views expressed in Economy Matters are not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System.
Editor's note: Throughout Economy Matters, "Southeast" refers to the six states that, in whole or in part, make up the Sixth Federal Reserve District: Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee.
Financial Tips from the Atlanta Fed: Financial Preparedness
Nota del editor: Este artículo también está disponible en español.
Financial emergencies can come in different forms: natural disaster, illness, injury, the death of a family member, job loss, and more. The pandemic brought additional unexpected expenses and a prolonged period of uncertainty. Although September’s National Preparedness Month promotes natural disaster planning, it also provides an opportunity to use lessons learned from pandemic experiences to delve into financial preparedness.
- Financial and Emergency Preparedness: Financial preparedness tools provide a good foundation in preparing for a variety of emergencies. Gathering critical personal, financial, and medical documents can be a key part of being prepared when disaster strikes.
- Income Disruption: Throughout the pandemic, some people have experienced prolonged job losses, sometimes by multiple earners in the same household. Traditionally, an emergency fund of from three to six months of living expenses has been a standard rule of thumb, but based on pandemic-related experiences, families may need to consider if this is still the right amount or if they need to stash away more funds as part of the financial recovery plan.
- Access to Resources: During the past year and a half, we have experienced supply shortages, business closures, and reduced hours due to staffing issues. The pandemic has made us rethink what is essential and how much of it we need to keep on hand. To be prepared, do some strategic shopping to stock up on nonperishable essentials to stay within your budget.
- Digital Access: Due to virtual schooling, remote work, pandemic shopping, the desire to stay connected to family and friends, and virtual doctor visits, digital access has transitioned from a nice-to-have to an even more vital part of our lives. Digital access can be a budget breaker for data overages and increased expenses. You may be juggling your budget and making hard decisions to adjust other expenses in order to secure your financial future.
- Money: Contactless and electronic payments became the payment method of choice throughout the pandemic. However, this method may have proven problematic and costly for unbanked consumers. Establishing a relationship with a financial institution can help individuals to keep their money safe and secure, create financial stability, and plan for emergencies. Learn more about opening your own checking or savings account. Resources are available to help manage and protect the finances of those who continue to weather considerable financial difficulties.