You’ve probably heard of the importance of saving for a “rainy day,” but you might be wondering how much you should save and where to store your funds. Setting aside any amount of money for emergency or unexpected expenses is always a good idea. Having a fund separate from your emergency fund can ensure that when the unexpected happens, you’ve got peace of mind.
How Much Money to Keep in a Rainy-Day Fund
While the right amount of money varies from person to person, experts suggest saving $1,000 as a starting point. $1,000 can help cover unexpected expenses such broken car parts, malfunctioning home appliances, and urgent care visits and medication prescriptions. Having extra cash on hand allows you to cover unforeseen expenses.
Always try to replenish the money that’s taken out of the rainy-day fund as soon as you can. This replenishing cycle allows you to always be one step ahead of most “rainy days” that may come your way!
Rainy-Day Funds vs. Emergency Funds
A rainy-day fund should be separate from an emergency fund. An emergency fund typically includes 3-6 months living expenses (mortgage, bills, groceries), and covers extended financial stress during major life changes. Since emergency funds are typically a much larger percentage of savings, they can be held in a money market account or a CD (certificate deposit) to earn interest while it’s not being used.
Where to Store a Rainy-Day Fund
Your rainy-day fund should be fluid, and therefore, easily accessible when needed at a moment’s notice. These funds can be kept as cash on hand or set aside in a simple savings account. Keeping these funds within arms reach allows you easily obtain the money for emergency expenses. An Eastex Savings Account can store your savings for when you need them most!
Automate Your Savings
If you’re wanting to build your rainy-day fund, try automating your savings. For just a few dollars a paycheck, you can reach your goal faster without all the hassle. Challenge yourself to save in little ways that can help you reach your goal of saving for a rainy-day fund!
An Eastex Credit Card for When Your Rainy-Day Fund Runs Dry
When your rainy-day turns into a rainy week or month, Eastex Credit Union has got you covered. Our Visa Credit Card gives you the ultimate peace of mind to cover a wide range of unexpected expenses for whatever comes your way. Apply for a Visa Credit Card today to have on hand in the event you ever need it! Being prepared for the unexpected with multiple sources of funds that includes cash on hand, cash in an Eastex Savings and an Eastex Visa Credit Card will allow you to stay one step ahead of some inevitable rainy-days!