By Unigo
Did you know that over half of Americans had less than $1,000 in their banking accounts, according to a 2017 survey? What’s worse, 39% had no savings at all and since most people don’t do saving for a rainy day.
That means the majority of Americans are unprepared for rainy days. What’s a rainy day? It’s an unexpected time of need, whether relatively small (like a college expense you forgot to account for) or something life-changing (like illness or the loss of a job).
Saving for a rainy day doesn’t mean you have to adopt a doom-and-gloom, disaster-prepper mentality. But, having a cushion of savings (sometimes called an emergency fund) might help you recover more easily from your next bump in the road that is why it is important to know how to save money for emergencies.
Here’s How to Start Your Rainy Day Fund Right Now
1. Use an Emergency Fund Calculator to Set Your Goal.
First tip for saving for a rainy day is to use an online emergency calculator (NerdWallet has a good one) to figure out how much you should save. Or, just do the math yourself. Common wisdom is that you should save for six months of your basic expenses, though you may want to aim for more.
2. Set Aside Small Amounts, Regularly.
Secondly, most savings accounts let you automatically contribute a set amount monthly, meaning you can save without even thinking about it. For instance, Wells Fargo offers “Way2Save” accounts that let you contribute a base amount each month, plus a small amount each time you use your debit card or pay bills online.
3. Make Saving Less Painful with Apps.
Another tip to have a rainy day fund is through apps. Gamifying your savings habit might make counting those pennies less of a chore. Digit is an easy to use service that tailors your savings to the amount in your checking account.
4. Find Hidden Sources of Cash.
From mailing in rebates to consigning your unwanted belongings, there are lots of creative ways to make (or recover) a couple of bucks. And, attention college students: don’t forget to sell your unneeded textbooks at the end of the semester.
5. Uncover Cuttable Costs.
Finding expenses you can cut from your day-to-day life is a bit like treasure-hunting. Try negotiating a lower cell phone bill, or learn to love the new, cheaper coffee place down the street from your current haunt.
Get into the Money-Saving Mindset
Naturally, we all hope those rainy days will never come. But even if disaster doesn’t strike, you’ll be happy to have a healthy emergency fund at your fingertips. Use this year’s America Saves Week as an excuse to get started!