Emergency savings accounts are the new “it” benefit offering from many employers. If the financial fallout from the Covid-19 pandemic taught us anything, it’s that the majority of Americans weren’t adequately prepared to weather an economic storm. Of course, that was true even before the pandemic. More than a third of Americans (37%) were unable to cover an unexpected expense without going into debt, a 2019 Federal Reserve study found. There is a fine line between financial stability and fragility. Savings balances of just above $250 tells a lot about your financial stability. A Savings balance over $250 is correlated with increased housing security, ability to pay utility bills, and avoiding high-cost borrowing. This, according to a recent SaverLife study sponsored by the FINRA Foundation.
It’s no wonder more employers are beginning to offer emergency savings benefits. Employees are taking notice. KFC is among the latest employers to offer an emergency savings benefit. After a pilot program initiated last year, KFC launched the full-fledged benefit across its franchises this week. The program is called MyChange, and it’s in partnership with SaverLife, a national non-profit fintech company that helps working families achieve prosperity through savings. The MyChange program is sponsored by the KFC Foundation, an independent 501c3 non-profit organization primarily funded by KFC franchisees. MyChange is designed to help KFC team members build short-term savings and create lasting savings behaviors.
A chief benefit of an emergency savings account benefit like MyChange is that it helps employees create a fund to keep themselves afloat. This is important in the event of unforeseen expenses, such as a car or home repair. Having an emergency fund can also help American workers avoid taking on debt or missing payments.
Here’s how it works: MyChange with SaverLife participants get access to the national SaverLife platform. They then have the opportunity to take part in national savings challenges! They can also access financial education articles, engage in forums and accumulate redeemable points for a chance to win prizes. The tools are designed to help KFC employees quickly build emergency savings funds and create life-long savings habits. Helping employees establish good savings behaviors can also translate to improved retirement savings. Employees quickly get acclimated to setting money aside for short-term, then longer-term goals.
According to a press release from the company, “eligible employees of KFC’s corporately-owned and franchisee-owned restaurants can also participate in Savings Match Challenges funded by the KFC Foundation. Enrolled employees in the Savings Match Challenge can get a $20 sign-up bonus. And by saving at least $10 a month, they will receive a $1 for $1 match of up to $40 per month over a six-month period. This empowers them to create a $500 short-term emergency savings fund. Or, they can boost their current savings by $500 (terms and conditions apply).”
Offering an emergency savings account benefit is a great for employees! Employers show they care about and want to encourage employees’ financial well being. It also helps employees get in the habit of saving and building financial stability. Offering an emergency savings account can also help enhance your recruiting and retention efforts. It also increases the competitiveness of your benefits package and demonstrates that you value your employees’ contributions to your business. If you’re an employer who’s thinking about offering an emergency savings account benefit – the time is right. Weigh the available options. Your employees will surely appreciate it.