Saving for a rainy day is about putting money aside, ideally equal to about 3 month’s salary, as an ‘in case of emergency’ fund. With the cost of living becoming higher, it can be tricky to put money aside for your Rainy Day Fund, but that’s even more reason to seriously consider how you can start cutting expenses and saving.
What is a rainy day?
Think of this as your safety net for unexpected expenses that crop up, like replacing an appliance, unplanned repairs to your car or home, or a last-minute flight to visit a sick parent. If you don’t have money saved up for these kind of emergencies, you may need to take out a loan.
Saving for big expenses like university tuition, a house or new car, require a different kind of investment and savings plan.
How to save for a rainy day
There are various ways to save for a rainy day, from opening a savings account, to putting extra money into your access bond, and looking into using a more investment-focused money market account. Consider this when deciding what’s right for you:
- How quickly can I get access to my money?
- Are there any costs involved?
- What are the risks involved in saving this way?
- What interest could I earn?
Remember, it’s always best to speak to your financial adviser if you’re unsure what option is right for you.
Have you got any savvy saving tips? Comment and share them with us.