7 Effective Ideas to Build Your Rainy Day Fund
Rainy day funds will help you to take care of any unexpected, minor expenses, until your next paycheck. Once it’s spent on things like buying a new car battery, repairing a dishwasher, and more, you can begin saving again for the future because well, life happens.
Here are seven useful money-saving tips that can help you to start saving for a rainy day fund:
- Take Small Steps First
A rainy day fund can play a significant role in making you financially secure. However, you don't need to set aside a large amount of money for this purpose. You can start small and save whatever you can manage daily, even if it’s just $5.
- Keep Your Emergency Funds Separate
Never mix your emergency fund with the rest of your money. Instead, you should keep a separate account for it and fix a particular day of the week or month to deposit money into this account.
- Ditch Credit Cards
Stop relying on credit cards for emergencies as this can lead to major financial problems in the future. This is because unless you pay off your remaining dues, you will be charged a substantial amount additionally as monthly interest, which will further add to your debt.
- Avoid the Stock Market
Even though it is tempting, never use your rainy day fund to invest in the stock market as this might put your money at risk. Also, this will ruin the very purpose of having an emergency fund because your money won’t be accessible to you when you need it.
- Make Saving a Priority
You should make savings your priority if you have decided to build a rainy day fund. For this, you need to set aside a fixed amount from your monthly paychecks, as soon as you get them instead of waiting to save the left-over income every month.
- Sell Things You Don’t Need
If you look around, you will find many unused items cluttering your home, such as a piece of old exercise equipment which you can sell and convert into cash. This extra cash can then help you accumulate more money for your rainy day fund.
- Get a Second Job
If you feel that your expertise can't be put to good use in your current job, then take up a second job. This will not only give you additional income to support your rainy day fund, but will also offer you the opportunity to widen your skill set and let you do some stimulating work.
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