Creating a rainy day fund
03 Sep 2021
We know that life is can be very unpredictable. Some days aren’t all sunshine, like when your car breaks down or your house needs an emergency repair. These situations happen to everyone. A rainy day fund is a fund that kicks in for an urgent or unexpected expense that you haven’t accounted for. This could be car repairs, unexpected travel or an urgent medical bill.
It provides a financial safety net so you don’t have to borrow money if something happens to you or your family.Having a rainy day fund available will give you more financial control and peace of mind. Read our tips below on how you can get started on your rainy day fund.
Setting aside money for a rainy day fund is fairly simple and definitely worth it. Here are a few steps to get started:
Evaluate what you need.
Take a look at your needs and budget and determine how much you should set aside for a rainy day fund
Open a dedicated rainy day savings account
A great way to start is to set up a specific account where money is set aside. Check out how you can set up your own account in the credit union, to start your savings journey.
Start building your rainy day fund slowly by contributing a small portion from your wages.
You can adjust how much you save into your rainy day fund. If you have more expenses ahead one month, you can reduce the amount set aside and if you have a little more left at the end of the month you can put some towards your rainy day fund.
It’s a good idea to regularly check in on your rainy day fund and replenish the funds whenever you dip into it.
When to use rainy day fund
While your rainy day fund should be easy to access, it’s very important to only use it for a real emergency. You should keep your fund to cover expenses when:
You need to pay something quickly
It can’t wait for a few weeks to save up and pay for it
You have no other money available
The content within this series is aimed to provide general guidance and information only. It does not represent financial advice.