When working entry-level jobs it can be difficult to contribute to a savings account. However, it is imperative for everyone to build up a savings safety net and therefore crucial for employment specialists to reiterate the importance of savings as a part of financial literacy training. Below are some resources to help you teach and encourage refugees to save:
“Savings” is money that is set aside for a specific purpose such as buying a home or emergency income. Cash left over in a checking account after paying bills does not necessarily count as “savings,” especially if the money is going to be used later in the same pay period. Similarly, if a client “saved” $5 at the grocery store, they have not necessarily increased their savings, but rather refrained from spending what was planned. Saving is not the absence of spending; saving is the intentional act of setting money aside for a specific goal or purpose. Many financial institutions have developed initiatives that include a curriculum covering the basics of money management with specific lessons on saving. Here is a link to some of our favorites.
As a part of financial literacy training, encourage clients to open a savings account the same time they open their checking account. When building a budget with a client, it is crucial to build in a line for savings, but how much should a client save each paycheck or month? The National Endowment for Education has developed several useful web-based tools, including Savings for Emergencies and Smart About Money. As clients enter employment, encourage them to put the appropriate amount of income into savings.
Incorporating savings into financial literacy and job readiness courses assists refugees with their long-term self-sufficiency and independence. Whether to buy a car or a house, or just for an unplanned emergency, learning how to save is crucial to success.