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 landscape, technology plays a crucial role in promoting financial wellness by making saving more seamless and accessible. For example, automating recurring transfers to emergency savings accounts helps members build their savings effortlessly over time.
Credit unions can also leverage fintech and related technologies to provide members with personalized financial insights, savings reminders, and interactive planning tools that guide them through setting up emergency funds. Digital solutions can enhance engagement by sending timely notifications, offering step-by-step financial education, and integrating features that encourage smarter financial habits.
Additionally, some platforms incorporate family engagement tools, such as emergency contact features, allowing members to involve loved ones in their financial planning. This approach not only supports individual members but also fosters deeper, multi-generational relationships with the credit union.
Ovation (formerly known as Paperwork) is one such platform designed to help credit unions support their members' financial well-being through a comprehensive platform that provides targeted insights, guided financial planning, and engagement tools that encourage lifelong savings and financial health.
To learn more about how Ovation can help your credit union’s members feel confident about their emergency savings, schedule an obligation-free consultation today.