A Rainy-Day fund is essential for everyone, no matter what you make or where you are in life these funds could make all the difference on those stormy days life throws at us. Figuring out where to start when building a rainy-day fund can be difficult, so we are providing you with all the essentials to get you started on the right track.
What is a Rainy-Day fund?
A rainy-day fund is like your umbrella during actual rain, but this one is used for life’s rainy days. It provides you with a little extra coverage to get you through whatever unexpected expense is thrown at you. Some expenses a rainy-day fund could help with are car repairs, doctor/vet bills, home maintenance, and much more.
How do I start my Rainy-Day fund?
The first step is to determine how much you would like to save. The recommended amount for a rainy-day fund is anywhere between $500 and $5,000. The amount varies based on your circumstances and financial goals.
The easiest way to find the best savings amount for you is to sit down and take a hard look at your monthly expenses and spending habits. You can sort your budget into what is truly essential and what you could live without. Make sure you take into consideration all the unexpected expenses as well.
After you’ve picked your magic number, it’s time to start saving.
How should I save for my Rainy-Day fund?
One of the best ways to start saving for your rainy-day fund is to set aside a certain percentage of your paycheck each pay period. After you’ve looked at your budget, you can figure out what you want to save each check and incorporate it right into your monthly budget.
Other ways to save include saving your coins, saving a portion of unexpected income such as work bonuses or contest winnings, or try an envelope savings challenge.
Remember, it’s okay to start small. Short term goals tend to be more attainable and help set you up for success in your long-term goals. Starting small doesn’t mean you can’t dream big!
Where do I keep my Rainy-Day fund?
The best place to keep your funds is a savings account that is accessible and where your money will grow. The top recommended accounts are a high-yield savings account or a money market account. Both have great benefits to help you in your savings journey. Penn East offers a range of savings accounts that cater to your reason for saving.
What can I do if I’m struggling to save?
We know sometimes saving money and building funds is easier said than done. Building smart money management habits will help you achieve your financial goals. You could consider setting up a direct deposit to automatically move some of your paycheck into your rainy-day fund.
You could also try Penn East’s Savings Boost that allows you to save without thinking. The Saving Boosts program will round up to the nearest dollar every time you use your debit card to make a purchase and deposit it right into your rainy-day savings account.
About Penn East Federal Credit Union
“Have a positive impact on our members, our community, and each other.” That is the common thread that goes across all of Penn East Federal Credit Union’s endeavors. With over eighty-five years in business and 24,000 members, the community-oriented credit union is a vital part of Northeastern Pennsylvania. Penn East FCU serves Luzerne, Lackawanna, Wayne and Wyoming counties with five branches and a 24/7 digital banking service through their website www.penneastfcu.org and their Penn East Mobile Banking App. Penn East FCU provides trusted financial solutions, integrity, and reliability to its members and community.
