We’ve all experienced those annoying little uncertainties—your tire is suddenly flat, or the engine is making a funny noise again. You come home and the air conditioner is on the fritz. You put the clothes in the dryer, only to find it doesn’t start! Yes, when it rains it pours. Do you have the rainy-day funds to cover all of life’s little uncertainties?
A Federal Reserve Board report found that most Americans can’t afford an unexpected $400 expense. Too many Americans find themselves living paycheck to paycheck with no money to put aside for an emergency.
If you don’t have any savings set aside for emergencies, it can set you back financially. Establishing a rainy-day fund is not that difficult, and you can get started by putting aside something from every paycheck, even if it’s only a few dollars at a time.
Here are a few ways to scrounge up some extra savings to put away:
- Make a monthly budget. That sounds simple enough, but very few have a monthly budget and those who do don’t usually stick to it.
- Cut back on the extras. This part is a little painful but necessary. Skip going out to eat sometimes and cook at home. It’s probably healthier and will cost a lot less! The same goes for social outings. Find something fun to do that doesn’t cost as much.
- Don’t use credit. Credit cards can be okay to use in an emergency, but if you use them on a regular basis, you are likely paying excessive finance charges unless you pay off your balance every month.
- Direct deposit into a savings account. Have a certain portion of your monthly check directly deposited into a savings account. You won’t miss a few dollars every month, and it can help save you if you get in a financial bind!
Establishing your rainy-day fund will take some discipline but can potentially save you from financial disaster. Don’t wait to see what’s left over after you spend for the month–take out the savings first and then use what’s left to pay for your monthly expenses. You never know, the next rainy day may be just around the corner!
