Surprise expenditures are a burden, let’s be honest! Like having to replace your water heater out of the blue…ugh! Or a friend announcing their destination wedding in Bali (yes please!) … but you look at your bank account and it’s a “no thank you”! When financial storms come your way, what do you do? You open a rainy-day fund! It is legit an umbrella that will cover you from the stress and worry that comes with surprise expenses.
Because no matter how financially disciplined you are, you can’t always predict the future, and sticking to your when unexpected expenses happen is super hard. But a rainy-day fund can help make sure those expenses don’t cause long-term financial harm. It will kick in for small, one-time expenses that you haven’t already accounted for. Starting rainy-day savings is fairly simple and worth it. Here are 5 ways you can get started.
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Open a rainy day fund account
Start with the basics. If you want to save you need to have an intention of saving and then go open a savings account. A rainy day fund is a good reminder that you need spare cash every month and keep an eye out for uncertainties. If you’re worried about initial deposits, don’t! Most online accounts are free to open.
Get inclusive with rainy day fund savings
If you are financially disciplined, then adding another savings plan will be a piece of cake for you. Start with reviewing your budget, analyze where you can draw money from to add to your savings. The bottom line is you will have to cut back on an existing expense to feed your new rainy day fund. But it’s for the better so no worries!
Don’t be afraid to start small
Start with what you have, no matter how small. Decide how prepared you want to be for an anticipated expense. For example, if you know for sure that an appliance in your home is super close to breaking down, work on building those savings bigger and faster, because your rainy day is closer than it seems and it might cost you a fortune.
When people say “every dollar counts” it’s true. Because every dollar you set aside for your rainy-day savings, will add to your relief when an unexpected expense pops up.
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Be consistent with your rainy day savings
Consistency is key in financial discipline. But you probably already knew that! The more you do something, the less painful it is—the same goes for saving. Sometimes the habit and consistency in saving matter more than the amount. When you consciously set aside a particular amount for your rainy day fund, you won’t have to scramble for money when an unpredicted expense comes up.
An easy way to stay consistent is to automate your savings.
Don’t dip into your rainy day fund
Your rainy-day fund is for emergencies only. Not for your vacations or your impulse purchases. So, stay disciplined and hold off on accessing the money in your account unless necessary.
