Tips on How to Save For a Rainy Day

tips-on-how-to-save-for-a-rainy-day

We all know that when an emergency arises, we should not let it get over our head. Because if we panic in critical situations, the chances are we will not able to keep a clear mind to make good decisions. At the very least, we need to remain calm to deal with the situation at hand. In line with these words, we should also be prepared both financially and mentally to dislodge the problem. In fact, many people save funds for these situations in advance.

This kind of resource is often labeled as ‘Rainy Day Funds.’ In this post, we are going to share some useful tips for starting a rainy day fund. Read the post carefully and save up to better prepare yourself for any unwanted situations that may emerge in the future.

  • Start Saving Now

Many experts recommend a savings of at least six months worth of living expenses. Research has been done to show that with the amount derived above, you will be able to deal with any financial emergency that arises. In any case, if a six months saving fund seems overwhelming for you, do not worry! All you need to do is start saving money. It does not matter if you save only $10 or $100. The thing that matters most is you have to be committed to saving money. So, save something from every paycheck and wait for a few months to increase the amount.

  • Go for Automatic Saving Process

When you decide to keep a rainy day fund, you must treat it as a financial obligation. Assuming that you want to save at least $10,000 in a year, you need to work back to figure out the required monthly amount that you have to put aside from every paycheck. Thereafter, you should ask your bank to set up a standing instruction to automatically transfer the fixed amount of savings from your paycheck account to your savings account. In truth, making your rainy day fund savings automatic will come good in the future.

  • Keep Track of Spending

When we get our paycheck, most of us only think about spending money – paying the bills or covering the living expenses. However, if you want to save something as rainy day funds, you have to keep track of where most of your money are being used. Observe for at least two to three months and keep track of all expenses, even the small ones. With this, you will have a general idea about your spending habits and where your money went. Start a budgeting list and include a spending and saving plan. At the end of every month, review your budget list to see if you have accomplished your goals.

  • Make a Habit for Spending Less

We all love to spend wildly on things that are wants and not needs. However, if you can rein in excessive spending on unnecessary things for 30 days, it is bound to have an impact on your spending habits. Using the expenses tracking that you have done, identify the spending on unnecessary items. Afterwards, you need to make a promise to yourself not to spend on these items for at least one month.

 

With the above methods put into practice, you will soon have saved up some money for the rainy day funds. Remember to put the funds to good effect such as investing in short-term funds or putting the money into an interest-bearing account! With the above said, however, If you do chance upon financial emergencies where your rainy day funds are not sufficient to cover, you can then consider taking up a Personal Loan from Banks or Licensed Money Lenders in Singapore to tie you over.

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