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After spending several years in social services, Nicole has finally followed her lifelong dream of being a full-time writer. In addition to her work for The Hudsucker, Nicole is also a staff writer for Womanista. An avid comic book fan, BBQ aficionado, professional makeup artist and first-time mom, Nicole can be found exploring Kansas City rich history when she's not blogging about suburban life at Suburban Flamingo.

Why You Should Prepare for a Financial Rainy Day

It is really easy to go every day without really thinking about money. Sort of. Most people think about money in some fashion daily, but usually in the context of bills that need to be paid, when pay day is, and the amount they are spending on their coffee habit. Most people don’t think about savings or about unexpected financial need. Disaster goes without a second thought until the disaster comes.


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According to Bankrate, 28% of Americans have no money saved for emergencies. The numbers for those who do have some money saved aren’t that great, though. Of the remaining 72% who do have savings, 1 in 5 have less than three months in savings. Three months is the general rule of thumb for what is the minimum adequate savings.

So why is it so important to have a “rainy day fund”? First and foremost it is important because emergencies happen. They happen and you generally no warning. When is the last time you could predict when a major appliance would suddenly stop working or your car fail to function? Sure, sometimes you get a warning, but more often than not things are fine one moment and not fine the next. With emergencies not exactly coming with a warning if you don’t have an emergency fund you may find yourself not being able to pay for them. Or, potentially worse, having to not pay for something else (rent, food, etc.) to cover the emergent issue. The lack of an emergency fund could set up a chain reaction of financial trouble taking a long time to recover from.

All reasons for setting up an emergency fund aren’t catastrophic, however. There are actually useful and positive reasons to create savings. According to Joe Young of Nasdaq, creating a rainy day fund also makes you reevaluate your budget. Most people presently living paycheck-to-paycheck don’t think that they have the money to save, but often hidden in the money we spend are places where changes can be made. When we sit down and look at what we really spend we often find somewhat wasteful expenses. Have a latte-a-day habit? That is easily $25 a week that could be either be put into savings in its entirety or the expenditure adjusted so that you could have a latte or two and some savings. Paying for Netflix but not using it? That is another savings opportunity. When you sit down to work on savings, it causes you to truly examine what you spend.

Young also asserts that another reason to put together a rainy day fund is that having such a fund expands your financial confidence and encourages investment in yourself. He gives the example of going back to school or simply taking night classes to better career opportunities. School can be expensive, but is pays off long term. However the cost of education can be daunting. Having a rainy day fund to offset costs should an emergency arise helps make the investment of education seem more secure, says Young.

That security may be the best reason to create a rainy day fund. Having money set aside for random emergencies allows you to worry just a little bit less about the unknown. Being prepared for the unexpected alleviates stress. Nothing is more valuable than peace of mind.

How do you save for a rainy day fund? Share with us in the comments below.

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3 Comments on “Why You Should Prepare for a Financial Rainy Day”

  1. AB April 7, 2015 at 6:03 pm #

    I literally save my savings. If I buy on items that are on sale, use a coupon or get a discount, I transfer that money to my savings account. Between January 1st and March 31st I had saved $369.

    • Nicole Drum April 9, 2015 at 12:58 pm #

      This is one of my favorite savings tips! I’m glad you shared it. It’s a simple and easy way to buy the things you want and need, but also be able to save money. I’m sending you a virtual high-five for awesomeness!

      • AB April 9, 2015 at 1:02 pm #

        *high five* LOL

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