Preparing For The Future: How You Can Ensure You’re Ready For A Rainy Day

It can be hard to live within your means in the best of times, but what happens when an emergency comes up? That's when people get into big trouble and start accumulating debt and getting into a financial hole that is hard to climb out of. A way to avoid that is to have a rainy day fund, or an emergency fund, to help you when those times come up. Here's some more about why you'll want one, and how to make sure you can make one.


If the past 18 months has taught us anything, it’s that life can be completely unpredictable. While it is impossible to prepare fully for global crises like the Coronavirus pandemic, it is important to have a plan should the worst happen. Saving for a rainy-day fund can be the ideal way to achieve this.

Having a rainy-day fund will also help give you peace of mind for the future and help you learn about good financial management. This article will explore what a rainy-day fund is, how you can build it up and ways to save and earn money to add to your fund.

What Is A Rainy Day Fund?

A rainy-day fund is a cushion of savings earmarked for unexpected bills or to live off for a short while should your financial circumstances change. It is separate from things like savings for a house deposit or your regular monthly spending money. A rainy-day fund is there to help you if, for instance, you need to repair your car or replace a kitchen appliance.

Decide How Much You Need

The amount of rainy-day funds you need depends on your circumstances. For instance, if you have kids and a mortgage, you will need a larger rainy-day fund to accommodate the expenses of parenthood and homeownership. It may help to start with a target, such as $1,000. This can give you a goal to work towards. It is a good idea to consider what the largest possible expenses in your life might be, such as unexpected healthcare bills.

Put Aside Some Of Your Earnings Each Month

As with saving for a down payment or car, it is essential to make regular contributions to your rainy-day fund. How much you save each month will depend on your earnings and monthly outgoings, but it is a good idea to save as much as you can afford. Consider opening a separate saving account for your rainy-day fund, and put some cash into it each payday.

Make A Budget And Keep Track Of Expenses

Budgeting is crucial if you want to build up a decent rainy-day fund. You should carefully consider your monthly income and outgoings and keep track of every penny spent. This can help you identify where your money goes each month and areas for improvement.

For instance, you may notice that buying coffee before work each day builds up to a significant expense throughout the month. Cutting back on unnecessary purchases like these can free up extra cash for your rainy-day fund.

Limit Your Luxury And Leisure Expenses

Luxury items and leisure expenses can quickly add up. That’s not to say that you necessarily need to cut all of these expenses out of your life, but it is important to keep them to a manageable level. Consider ways to cut back, for instance, by buying new clothes less frequently and purchasing higher quality items that will require replacing less often.

Switch Your Utility Providers

It is an excellent idea to do some research into the utility providers in your area. Changing your provider can often lead to significant savings, giving you more money to dedicate to your rainy-day fund. It may help to look out for offers and promotions that can help you get the best value for money.

Use Credit Cards Correctly

Credit cards can be an excellent tool if used wisely. Many people worry about using credit cards, thinking they may find themselves in debt. This is why it is so important to be strict with your use of credit cards and use them in the best ways possible. You can find plenty of information on the smartest way to use a credit card from Tally, industry leaders in helping people understand credit use and stay out of debt.

Launch A Side Business

Earning more money is an excellent way to improve your rainy-day fund. Side businesses have taken off in recent years, thanks in part to the current economic climate. If you have a particular skill or talent that you could monetize, starting a side business could be an ideal way to add to your fund. You could also consider freelancing with skills such as proofreading, copywriting, web design or programming.

Plan Your Meals Each Week

Many extra expenses in American households can come from spending money on eating out or ordering in food. You can avoid doing this by ensuring that you plan your meals in advance each week. Not only will this save you money on dining out, but it will also help you stick to your grocery list and avoid over-shopping.

Consider taking time each weekend to work out what you and your family will eat for the week ahead. You could also do meal prep for your lunches at the weekend to avoid paying for lunch during the busy weekdays.

Give Yourself Cooling Off Periods

Before you make any non-essential purchase, give yourself some time to think. It could be an hour, a day or a week. The way things are marketed in 2021 encourages us to make quick, impulse purchases. It is crucial to avoid falling for traps such as this if you want to build up your savings. Taking time to consider if you really want to make the purchase can be an invaluable way to help you keep hold of your money.

Consider Refinancing Your Mortgage

If you’ve been paying off your mortgage for a while, you may be able to refinance it to get better terms on interest and fees. This can give you better peace of mind while helping you boost your savings pot. You should consider discussing the changes with your bank and see what kind of options they are willing to give you.

Switch To Own Brand

Buying branded items can quickly add up in cost, and quite often, you won’t see any real difference in quality between brand names and stores own brands. Consider testing out different groceries to find ones that work for you and your family. You can also consider switching from big brand names for clothes, cosmetics and skincare.

Penniless Parenting

Mommy, wife, writer, baker, chef, crafter, sewer, teacher, babysitter, cleaning lady, penny pincher, frugal gal

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