We all have bad days when unexpected misfortune is thrown our way. You can make those days a little less painful by preparing for the costs ahead of time! A Rainy Day Fund will help you protect yourself financially from life’s mishaps, such as fixing a flat tire or a small plumbing problem.
1. Separate Your Savings
You can separate your savings accounts to better track your savings. For example, you may have one savings account for medical emergencies, one for vacations, and one for your Rainy Day Fund. This could motivate you to save more. If you see one of your savings areas lacking, you can concentrate more money into that account on your next payday.
2. Save Extra Income
While it may seem obvious, it’s definitely not easy. When you receive extra income, whether it be a work bonus or birthday money, put that money directly into your savings account. Delaying the short-term gratification of spending it can lead to more significant peace-of-mind in the future.
3. Start Saying No to Whimsy
Before you go shopping, make a list of what you need. Buy no more than what is on that list and shop purposefully. If you love the occasional “splurge,” account for that in your budget. For example, allow yourself $20/week to spend however you please, whenever you please.
4. Set a Goal
It’s hard to know where to begin if you haven’t set a goal. For many, a Rainy Day Fund is the first step in learning how to build a larger emergency savings. It sets the foundation for a more detrimental financial emergency, such as losing a job. Start small but be specific about what you hope this account to look like three, six, and twelve months from now. Setting and achieving your goals is great motivation!
We offer a variety of accounts to keep your Rainy Day Fund safe and secure. Learn what works best for you at Iowa State Bank.
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