What is a Rainy Day Fund?

A rainy day fund is a small savings meant for surprise payments outside your planned monthly spending. Your rainy day fund is there to make sure that when life happens, your whole budget isn’t thrown off. Whether its replacing a kitchen appliance, or a surprise auto repair, we can all agree that it is good that it’s good to have a little bit saved when the unexpected happens. Here are a few tips and tricks that you can try to start setting money aside for a rainy day:

1. Limit Small Purchases & Replace the Money in Your Savings
   A great way to begin saving money is to make small changes to your spending habits. Often, these spending habits are focused on small, repetitive purchases. The most common example is-surprise, surprise-buying coffee. While the actual savings may not seem like much at first, they will begin to add up over time. Take a look at your own spending habits to see where there is room for more savings.
2. Automate Your Essential Recurring Charges
   One of the easiest ways to start saving money for a rainy day is by automating your bills. We all know that feeling of forgetting to pay a recurring bill and getting hit with a late charge fee. Whether it’s utilities, rent, or credit card payments, the good news is most companies provide the option to set up automatic payments. By setting your bills up for automatic payment, you can save considerable money over time, prevent yourself from getting into credit card debt, and avoid any possible fees. If a company charges a fee for making payments with credit cards, consider using our FREE Bill Pay service in online banking.
3. Set Up Automatic Monthly Transfers
   Remembering to set money aside for the unexpected can be challenging. When you think about it, the unexpected happens more often than most of you would like! Consider setting up automatic monthly transfers to your rainy-day fund to prepare for that. You will continue your regular spending habits while a small amount of money is moved from your checking account to your rainy day fund each month. You can start small with $10 to $20 per month. You can even set low balance reminders on your online banking to ensure you never end up with an accidental overdraft charge.
4. Split Up Your Paycheck
   Another way to save money for a rainy day is by splitting your paycheck. Many employers now provide the option to split your paycheck between multiple direct deposit accounts. Simply designate a percentage or dollar amount and you can send funds automatically to your rainy day fund. Check with your employer to see if they provide this option. Start with your end goal amount to determine how much you want to deposit into your savings account for a rainy day. For example, $100 goes into savings per month. Once you have your end savings goal in mind, you can predict how long it will take you to reach your goal. Your final number will be the amount you need in your savings account each paycheck. As your checks are deposited, your rainy-day savings will grow automatically, and you can rest assured that you are prepared for any unexpected future expenses.

Reference
https://www.msn.com/en-us/money/personalfinance/5-easy-strategies-to-save-for-a-rainy-day/ar-AA12OgAe.