The Hidden Impacts of Climate Change on Your Financial Health and Well-being

How is climate change impacting your day-to-day life? SaverLife spoke with our members to learn more about their experiences with the shifting weather. Here’s what we learned:

• 58% of SaverLife members say they’re concerned about a severe weather event or disaster where they live.
• 54% say that they can afford just a few or none of the costs associated with a severe weather event.
• 65% say they would need at least $3,000 in savings to recover from a weather-related event.

Today we’re sharing what the rippling impacts of climate change look like in our members’ day-to-day lives 

Climate change causes a ripple effect

So what are some of the hidden financial health impacts of climate change?

For SaverLife member Megan, it’s understanding how the physical effects of summer temperatures impact her paycheck. When the hot weather upsets her asthma, it can affect her monthly budget and create more stress. When Megan’s asthma flares up, it impacts the number of hours she can work. This shift in hours can mean fluctuating income, and fluctuating income can further delay her financial health goals like paying down credit card debt. Not only does this mean accounting for when hot weather upsets her asthma, but also how it can affect her monthly budget, create more stress, and ultimately delay her longer-term financial goals.

For other members, this looks different. SaverLife member Alizha feels the financial burden of climate change when there is extreme weather in the forecast. Her decision to evacuate or ‘stay put’ squarely depends on what her finances look like — not on the severity of the storm. If she’s recently got paid and has the money to evacuate, she does. But if she doesn’t have the funds to evacuate, she and her family stay put and hope for the best.

Hidden financial effects of climate change

Understanding the financial effects of climate change and how it impacts almost every aspect of daily life is important.

When we understand all the ways that climate change intersects with financial health, we can better articulate the challenges it poses and advocate for policy changes (like tax credits and rebate programs) that will benefit you, our members.

Through conversations with members, we learned they overwhelmingly want to invest in weather-related disaster planning resources that are covered by many policies and tax credits. However, they’ve also shared that the pricing for these resources is out of their budgets.

Read on to learn how climate might already be impacting your transportation, housing, and monthly expenses.

Monthly expenses

SaverLife members are already preparing for the financial effects of climate change in their own ways. However, expenses caused by severe weather go beyond the actual event. 

Climate change can affect all kinds of monthly expenses, including:

• Utilities — Extreme weather events like heat waves and winter freezes can cause unexpected price fluctuations on utility bills. This can affect how you plan your budget and save for long-term goals.
• Insurance coverage — Depending on where you live, potential weather events like flooding or wildfires can increase the cost of your home or renters insurance. 
• Groceries — Climate change can impact the pricing and availability of certain products, especially when they’re already in high demand. If you experience a power outage, your groceries can also go bad sitting at room temperature for too long.
• Housing — Severe weather can cause damage to your home or car that might need to be addressed immediately (and before your insurance company approves your claim). During this period you might need to pay for a hotel or alternative transportation. This increase in expenses can also impact your usual budget for paying rent or your mortgage.
• Credit card or loan payments — Climate change can disrupt your entire budget, causing a ripple effect with your other payments and investments. In fact, SaverLife found that 25% of SaverLife members have already missed a monthly payment or household bill due to financial hardship after a severe weather event.

Housing

Whether SaverLife members rent or own their homes, they’ve encountered additional financial challenges related to climate change. In particular, they’ve found that upgrading to environmentally-friendly amenities requires a large up-front investment or loan, which often doesn’t fit into their already tight budgets. Plus, if they’re a renter, they also need approval from their landlords.

What have SaverLife members shared they want to purchase to reduce necessary utility costs and weatherize their homes? 

• A backup generator in case of power outages
• An energy-efficient water heater to cut the amount of electricity used to heat your water
• Solar panels to cut the cost of your electricity bill

Transportation

SaverLife members have shared that severe weather like rain, snow, and winds make it hard for them to commute to work and run errands, especially if public transportation isn’t running or the roads are dangerous.

But the impacts of climate change on transportation can go even further, resulting in:

• Loss of income — Without safe and reliable transportation to work during bad weather, you can lose work hours, potentially impacting your total income for the month.
• Increased car expenses — Weather events can increase wear and tear on your car, leading to more service costs to keep it in good condition.
• Limited public transportation — If public transportation isn’t equipped to operate during severe weather, it could be delayed or canceled.

Take action where you can

At SaverLife, we call climate change “the fight of our lives.” Why? Because we all need to take action now to ensure we’re addressing its daily impacts. It’s also important that we work together to create a different outcome for our families and future generations.

SaverLife members have complex lives and unique priorities that shape how they plan for their long-term goals. No matter how our members are mapping their futures, we believe in giving the SaverLife community all the information they need to begin preparing for climate change on their own terms — and while still taking steps toward their financial health goals.

This month we’re launching a new series with expert tips, tools, and resources to help you protect your finances from climate change. Check Money 101 for weekly updates or become a SaverLife member and subscribe to our emails for the latest updates.

Climate change is already present in our lives, but that doesn’t mean it has to rule our plans for the future. Share your story about how you’re preparing for climate change by completing this short survey now.

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