Q: Red River Bank "U" emphasizes the importance of saving for unexpected expenses. What's a good ballpark savings figure to shoot for—is that a factor of income?
It's a factor of expenses. We recommend establishing an emergency fund that would cover three to six months of regular bills.
Q: How many people would you say have that kind of emergency savings? And what do you see as the primary obstacle to reaching that goal?
If I were guessing, maybe 10% of people have been able to put away that kind of fund. Everyone has hurdles. Take current emergencies, for instance. If you have a big expense this month, it's hard to save for future costs. In some cases, there's truly not enough money for a period of time. But I would say in most cases, not saving is tied to spending on things we don't necessarily need.
Q: How do you recommend getting started?
Just by starting—even if it's just a little. Opening a savings account is the most critical piece of the puzzle. With that would come next is a regular savings plan, setting up an automatic transfer of money monthly or with every pay period—even if it's only $25.
Q: It seems like such a small amount.
Taking that first step often builds a sense of financial confidence and independence.  Once that happens, it can seem more possible to continue making small increases either in the frequency or amount saved.
Q: What kind of savings account do you recommend?
One great option here is our DreamBuilder account. The minimum to open it is one dollar, and it requires monthly transfers of $10 or more from your checking account. The account also comes with limited withdrawals to help people hedge against that temptation.
Q: You're personally involved in teaching financial literacy, correct?
I'm passionate about it. I work with schools to teach financial literacy to classes from 3rd to 5th grade. Any teachers that are interested in scheduling a financial education seminar for their classes can contact me or our Community Relations Officer.
Q: Where do you recommend that parents start with teaching financial literacy at home?
Again, with a savings account. A piggy bank at home is historically the primary tool people use, but having a savings account really helps children understand what banking is like, and the discipline of putting your money in a bank and leaving it there opens up conversations about the differences between wants and needs.
Q: Assuming that some confusion about wants vs. needs is part of what holds adults back, too, what else do you think gets in the way of saving? Do credit cards play a role?
In some folks' minds, access to credit has taken the place of self-financing their emergencies. What happens next is that making payments on that credit eventually replaces the ability to save on a monthly basis. Then when another emergency happens, that expense goes on a credit card as well. A snowball effect takes place.
Q: You've mentioned a positive snowball effect happening when someone sees even a small success as they begin saving. In addition to the importance of taking that first step, however small, do you have any further parting advice on saving?
Yes. If you're not saving for retirement or are concerned that you're not saving enough, check out our retirement calculator. As with other savings goals, sooner is better. Starting now can mean a larger difference in a retirement plan later.