How to Save Money for a Rainy Day
Saving money for a rainy day may seem impossible at times. Everything around us seems to be increasing in price, yet your pay probably remains stagnant. Everyone should attempt to put away money for an emergency, even if it’s only a little at a time.
If you don’t already have one, then you probably often hear from people around you that you need an emergency fund. What is an emergency fund anyway? An emergency fund can simply be thought of as a safety net or a sum of money that is readily accessible to you in the event of a financial mishap or emergency.
Many people dismiss emergency funds because they often think, “A financial crisis won’t happen to me.” The reality is that disasters can and DO happen, and it’s imperative that you are prepared for them.
Top 5 reasons why you should save for a rainy day:
1. You Could Lose Your Job –
It doesn’t matter how secure you are in your position at work; anything is possible when it comes to your employment. It’s a good idea to have an amount of money saved to cover at least 3-6 months of bills and other expenses. This provides you time to straighten out the situation and find another source of income before your emergency fund runs out.
2. A Serious Health Condition Could Creep Up –
How are you going to finance a random and unexpected trip to the emergency room, should it arise? It’s impossible to know when your health will take a downward turn, and that’s why it’s imperative that you start building your emergency fund as soon as possible.
3. An Expensive Home Repair Could Pop Up –
Who’s to say your air conditioner won’t break down on a day when the heat has soared into the triple digits? Unexpected home repairs might not worry you too much if you already have home insurance, but don’t be fooled. Home insurance probably won’t cover 100% of the possible things that could go wrong in your home.
4. Your Car Could Clunk Out –
You probably take your vehicle for granted if it seemingly never malfunctions, but for every extra mile that is put on a vehicle, the chance for car trouble to pop up rises little by little. In some cases, car repairs can be as cheap as $50, while other repairs can require thousands of dollars. Will you be prepared if your car malfunctions when you need it most?
5. You Could Have to Unexpectedly Travel –
Lastly, unexpected travel won’t pay for itself if you find yourself needing to suddenly go out of town. Maybe it’s for a funeral or the birth of a grandchild. Sometimes these types of things can pop up and they can cost a small fortune! Avoid putting these types of expenses on credit cards by starting your emergency fund now!
Here are some easy ways to save money for a rainy day:
- Throwing all of your loose change into a jar or polar water jug each night is a good idea. Never give change when you are making a payment, only accept change back. This adds up quite quickly and some people use this money as an emergency fund or vacation fund. If you have the ability to save even more, place everything under a five-dollar bill in your change jar each night.
- Save your coupon money. Most people use coupons when they shop now, so why not take advantage of the money you save? If you save twenty dollars using your coupons, take that twenty and stash it into an interest-bearing savings account.
- Have a garage sale or yard sale. Clearing out your home of all the older things you no longer use or want is a great way to start your nest egg or emergency fund. Hold a sale over the weekend and see how much you earn. In addition, if you have remaining items donate them to a local charity and get a tax credit. Apply the amount you are credited to your savings.
- Make your morning coffee at home. If you make a cup of coffee at home every morning, instead of stopping and buying one, you can place that money back each day into your rainy day fund. You will be amazed how quickly this adds up to substantial savings. Most people are actually unaware of how much money they spend each year on purchasing to-go coffee.
- Convert your credit card bonus points or rewards points into cash. Many credit cards and debit cards now offer rewards points for their everyday use. First, make sure that you are enrolled in these programs so that you benefit each time you make a purchase. Use your points to redeem for free gift cards or cash back bonuses. When you use the gift card at your favorite restaurant or store, take the real money you would’ve spent from your checking account and place it into your interest-bearing savings account instead.
These are just a few ideas and ways you can save for a rainy day without having to rework your entire budget. Being frugal because making major cutbacks can be really hard to accomplish sometimes. It’s best to start out with small things and work your way up. You’ll be surprised at how quickly the little things can add up.
If you require assistance with setting up a spending budget and figuring out a comfortable amount to save each month, then give us a call. Our certified credit counselors will go over your budget with you and suggest some areas where cutbacks can be made. This way you know for certain that your savings plan is the best it can possibly be. We can also help you get out of debt so you can free up more money and start saving for the future. Visit us online at www.advantageccs.org or give us a call toll-free at 1-866-699-2227.