Life is full of ups and downs. You can sail through tough times if you have the support of your loved ones and adequate funds to see you through. It is important to save for rainy day funds. With high rates of unemployment and inflation it is important to plan well in advance for the future. A rainy day fund is also known as an emergency fund which will ensure your financial liquidity at all times. You can consider putting away some amount of your income in an interest earning savings account to secure your future. Do not use this amount of money for investments.
Maintaining a savings account
For rainy day funds a regular saving account is ideal. The savings can get you through tough financial situations and help you to finance emergencies. You should keep this section of your savings in a different account where other transactions do not affect this savings. It is essential that you are consistent and savings become a regular part of your monthly budget. Decide on how much you can save and ways in which you can reduce your spending. This additional amount of money can go into your rainy day funds. Do not wait for the end of the month to make the deposit and do not make withdrawals from the saving account until it is necessary.
Meeting unforeseen expenditures
Unexpected expenditures can come in any form. Your car may break down suddenly or medical expenses may arise which you have to fund for. You can meet the expenses easily if you have rainy day funds. Make sure that you do not procrastinate, rather start saving today. You can easily open a savings account with a bank or a credit union. You can start by saving a small amount and gradually increase savings as you cut down on unwanted expenditures. You will have to develop the habit of saving money.
Saving wisely
You can consider automating your savings so that funds go into your rainy day savings directly. You can easily set up recurring transfers so that money moves from your checking account to your savings account directly such that your savings for the future grow at a steady rate. Opt for a high yield savings account which will help you to maximize your money. You can increase the value of your account by transferring perks, cash bonuses and incentives which you earn. Without much effort your rainy day fund will increase. If you want to have financial freedom in all situations a rainy day fund is very essential.
An emergency fund
There are several reasons why you may have to tap into an emergency fund. You may lose your job suddenly or your child may suffer a medical emergency. You may suddenly require funds to finance your child’s education or may need to repair your refrigerator. So that you are solvent in cases of emergency a rainy day fund should be your priority. If you have currency in hand handling tough financial situations will be easier. At least one to three months expenses should be set aside.
A lawsuit loan
If you are involved in a lawsuit you can apply for a lawsuit loan. You can redirect the amount of money which you receive towards a rainy day fund. The amount you receive through the lawsuit loan will not have to repay if you lose the case. It is a non-recourse loan which will help you to meet the expenses of daily life. It is recommended that you keep at least one to three month’s expenses in cash. By cutting your budget you can save for the rainy day. You can consider getting a second job as well.
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Surprising expenses can come in any type. Your car may crack down instantly or healthcare costs may occur which you have to invest in for. You can fulfill the costs quickly if you have stormy day resources.