The Importance of Saving Money for a Rainy Day

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We can plan all we want and make contingencies for all the curveballs life throws our way, but the truth is, things don’t always go along to plan. Whether it’s an everyday emergency or some surprise bills, there’s always going to be a need for some extra money. Fortunately, money-making forums like ETB have been giving you all sorts of ways to save and earn money. Hopefully, these tips have helped you overcome the challenges that life hurls at us.

For this article, I’ll be talking about something called the rainy day fund. A rainy day fund is an important component of your personal finances. People usually talk about investments and checking accounts, but they sometimes neglect saving up for smaller, more mundane emergencies. A rainy day fund is a perfect way to tackle those small emergencies. In this post, I’ll be giving you tips and tricks on how to build your own rainy day fund – and hopefully, make it grow.

A rainy day fund shouldn’t be something you overlook in your financial planning. This type of fund is essential for making it through the day to day. Want to learn more about it? Read on!

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What is a Rainy Day Fund?

A rainy day fund is a type of savings. But it’s pretty different from, say, emergency savings. Actually, most of the people I know tend to mix up rainy day funds with emergency savings and tend to use both words interchangeably. While there’s nothing really wrong with that (I’m just happy people are talking about savings in the first place!), there are some pretty distinct differences between the two.

Emergency savings are for bigger things. Normally, a good emergency savings fund will be enough to cover potentially life-altering emergencies, like a medical emergency or losing a job. Perhaps the most common use of an emergency savings fund is to cover for unemployment. And that’s why emergency savings funds usually have enough money to cover up to three months without income. A rainy day fund, on the other hand, is for smaller emergencies. They usually aren’t life-altering, but they have the potential to derail our finances. And that’s why it’s good to have a fund that covers those expenses. These expenses can come in different shapes and forms, some more severe than others. A few examples of expenses that your rainy day fund can cover include:

  • Emergency groceries
  • Emergency clothing needs
  • Emergency pet supplies (we’re always running out of cat litter ahead of schedule)
  • Over the counter medicines
  • A day or two of unpaid sick leave
  • Minor household repairs
  • Minor car repairs

… and the like. These expenses can be paid for using money drawn from your rainy day funds.

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Some Tips on Making Your Rain Day Fund

Now that I’ve talked about what a rainy day fund is, and the importance of maintaining this type of savings, it’s time to give you a few strategies. These tips and tricks will be helpful when it comes time for you to make your rainy day fund.

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Open a Separate Bank Account

Since this is money you are not supposed to touch, it’s advisable to keep it somewhere you won’t be able to just reach in and spend the money. And that’s why I recommend getting a separate account just for your rainy day fund. If possible, you could also look into getting an automatic savings account. What this type of savings account does is immediately dock your pay and put the amount directly in your savings account. That way, the act of saving money is automatic. Also, make sure your bank account has an ATM. While you’re not supposed to touch the money whenever you feel like it, you should be able to withdraw the money quickly and easily in case an emergency happens.

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Try the Envelope Method of Budgeting

If you’re not keen on opening a bank account just for this purpose, you can always try the so-called envelope savings method. This technique is exactly that – you set aside money according to your budget, and you put them in the corresponding envelope. It’s a simple, almost no-brainer, way to save money, but the simplicity is what makes it great. Plus, it’ll be easy to get money in case you need it (make sure you spend your rainy day fund on essentials and emergencies only!).

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Earn Extra Money Using a Rewards Site

This isn’t a savings method per se. Instead, this is a way of making money. Rewards sites will pay you for doing simple tasks like answering surveys, watching videos, and completing offers. There are a lot of rewards sites out there, and some of them are, unfortunately, pretty scammy. I’ll save you the pain and frustration by recommending two legit rewards sites: GrabPoints and ZoomBucks. Both these sites are run by the same company, and they’re pretty awesome.

Both sites have the highest payout rates in the world. This means that for each survey you answer, video you watch and offer you complete, you will earn more from GrabPoints and ZoomBucks than if you had done the same amount of tasks on a different rewards site. You won’t get rich doing this, of course. But the money you’ll be making on GrabPoints and ZoomBucks is enough to supplement your regular income – which is perfect for building your rainy day fund!

Payout processing on these sites is also pretty fast. As soon as you’ve accumulated $3 to your account, you can request a payout, either in cash or gift cards. You will get your rewards within 48 hours, which is pretty fast processing time, even compared to other legit rewards sites.

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Have Goals and Milestones

Building up a rainy day fund, like any other savings, can sometimes feel tedious. To help you stay on track, I suggest creating mini-goals and milestones to hit. These goals will have to depend on your own financial plans, but they could be something like saving $100 in a single month, and so forth.

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