The phrase, “saving for a rainy day”, simply means to put money away for an emergency. You never know when you will need to make car repairs or pay for an extra book in college. Another unexpected expense is home repairs like having to fix a leaking roof or replacing plumbing pipes. These are the kind of expenses that pop up when you least expect and are not prepared for it. One way to deal with these unexpected expenses is by having money set aside for them. Learning how to save for emergencies and surprise expenses is a vital skill that can reduce stress in the future.
*Budget
This is a must for anyone who is trying to save money. By making a list of where your money is going, you can start eliminating unnecessary expenses and put that saved money into a rainy day fund.
*Coins
The idea of saving change is certainly not a new one, but it is a good one. Think of all the coins that might be hiding in your vehicle or in the cushions of your favorite chair at home. What about all those pennies you come across when walking down the street? Pick up all of that loose change and put it in a jar. When the jar is full, haul it in and exchange it for paper money and then add it to (or begin) your rainy day fund. Make a habit of paying for things in whole dollar amounts and save all of the resulting change.Those pennies, nickels, dimes and quarters add up super fast.
*Holiday/birthday money
Make a habit of saving any holiday and birthday money in your rainy day fund. This should not be too difficult since the money is not income you count on each payday, or even once a month. You can ask friends and relatives to contribute to your rainy day fund instead of buying you gifts. This may not sound like much fun, however your future self will thank you for being so responsible!
*Give up one indulgence
If you enjoy treating yourself to a new pair of shoes each payday, then give up one pair of shoes and put that money into your rainy day fund. This idea applies to any indulgence you have, even chocolate candy bars. By skipping just one indulgent purchase, and saving that specific amount, you can start accumulating a rainy day fund. You might be surprised how fast this practice can turn into a positive habit.
These are all examples of ways to grow your rainy day fund on a regular basis. There are of course, other ways to save money for emergencies like investing in stocks, bonds and CD’s. The thing to remember about saving money for an emergency is that it involves sacrificing a little now in order to have financial relief when you need it.