Plan for a rainy day by seizing the opportunity that you are presented today.

by Angela Marquis on July 30, 2015

rainy day funds

Everyone has those unforeseen disasters in their lives.  Our car breaks down, we blow a tire, the hot water heater stops working, the AC dies or your pet becomes ill and now you have a big bill.  Things will go wrong!  Cashing in RRSP, taking out short term loans or maxing out your credit card to cover the unexpected bills just puts you behind financially.  For a majority of people their financial planning doesn’t look too far ahead.  They think about the bills due at the end of the week or the month and what they need to cover the grocery list, but don’t plan for unexpected expenses or disasters.

Plan for a rainy day by seizing the opportunities that you are presented with today.  Make a budget and plan monthly on saving towards a rainy day fund, and use that fund for emergencies only.

Having an emergency fund will help you protect your finances, keep you out of debt, and get you through those rainy days.

5 Rainy day saving tips:

  1. Set a goal – save enough money to cover one or two major unforeseen expenses. This may take a bit to save so start out small by putting a monthly amount into a rainy day fund or emergency fund and increase it when you are able to.
  2. Treat your rainy day savings like a bill and pay into it monthly.
  3. When you get a tax return, a bonus from work, gifted money, etc. save some of it for the rainy days.
  4. Where should you keep my rainy day funds? If you have a budget and follow it, the budget doesn’t care where you physically store the money, however, if you’re worried that you’ll spend it, open a separate account at the bank or credit union.  You are less likely to spend the rainy day money when it is in a separate account.
  5. Set up an automatic debit withdraw from you pay cheque each month so you don’t forget or accidentally spend the rainy day money.

When we prepare for emergencies, we won’t get caught in the rain without an umbrella to keep us dry.

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