How Credit Unions Can Help Members Build Financial Resilience with Emergency Planning
Today’s financial landscape is marked by economic uncertainty, so it’s more important than ever for your credit union’s members to have an emergency plan. Whether it’s losing a job, getting sick, or a loved one dying, unexpected life events can uproot even the most carefully laid plans.
Credit unions can play a vital role in helping their members plan for emergencies beyond creating an emergency fund. By providing important estate planning, helpful insurance products, and other emergency planning resources, your credit union can improve member financial health and protect your credit union’s financial standing.
The Role of Credit Unions in Emergency Planning
Helping members plan for emergencies is directly related to the health of your credit union. When credit unions focus on member financial wellness, they improve member engagement. A cornerstone of a solid financial wellness strategy is emergency planning, but more than half of Americans can’t afford a $1,000 emergency.
Credit unions have much to gain from ensuring their members are financially stable. Well-prepared members are less likely to default on loans, thereby reducing the financial risks for the credit union. Additionally, members who feel supported in their financial planning are more likely to remain loyal, thus driving member retention and deepening engagement.
When credit unions assist members in preparing for unexpected financial hiccups, they are adding a vital layer to their members’ overall financial wellness. By helping members feel more financially secure, credit unions can also increase their referral numbers and grow their member base.
Strategies Your Credit Union Can Use to Help Members Plan for Emergencies
When it comes to financial wellness, information and options are key. Members need to understand the potential risks they face and have the tools at their disposal to mitigate these risks effectively. Credit unions are uniquely positioned to provide both, thanks to its community-focused mission and ability to offer tailored financial products. Below are some strategies your credit union can employ to help members prepare for life's financial curveballs.
Educational Programs
Education serves as the foundation for an emergency plan, and beyond an emergency fund, most people do not know much about emergency planning. Your credit union can host a series of workshops on the basics of emergency planning, including topics such as:
Establishing an emergency fund
Securing proper insurance coverage
Creating the correct legal documents for emergencies
Working with family members to prepare for emergencies
While in-person events can foster a sense of community and allow for interactive Q&A sessions, online webinars, e-books, and blog posts can be an excellent alternative to reach members who can't attend physical events. This multifaceted educational approach ensures that all members, regardless of their schedules, can benefit from this valuable information.
Tailored Financial Products
Having the right financial products can make the process of saving for emergencies considerably easier. Your credit union can offer specialized emergency fund accounts with features designed to encourage saving. For instance, a high-yield savings account could offer higher interest rates for maintaining a minimum balance, or even bonuses for regular contributions.
For those who find themselves in immediate need and have not yet created their emergency fund, short-term loan options could be provided as a financially prudent lifeline. Offering insurance products, such as life, disability, home, and auto, can also help with a crucial piece of emergency planning.
Personal Financial Counseling
While general guidelines can be helpful, each individual’s financial situation is unique and may require specialized advice. If your credit union provides coaching, it can offer one-on-one consultations specifically to help members develop a tailored emergency planning strategy.
Periodic financial health check-ups can also be instituted to ensure that members are on track with their emergency savings and make any necessary adjustments to their financial plans.
Technology Tools
In today's digital age, technology can be an invaluable ally in promoting financial wellness. Encouraging members to set up automatic transfers to their emergency savings accounts can make it much easier for members to build up their savings over time.
Credit unions can also utilize Paperwork, our white-label comprehensive financial wellness app, to send timely notifications that encourage saving and to guide members through modules that detail each step of creating their emergency plan. We understand that everyone's financial journey is unique, and that's why we provide financial insights tailored to each user.
One of our standout features is the inclusion of emergency contacts within the app, which encourages members' families to become involved in financial planning. In doing so, we not only assist the individual member but also nurture a credit union relationship that can span across generations.
To learn more about how Paperwork can help your credit union’s members feel confident about their financial plans while improving member engagement and retention, schedule your free analysis today.