5 Ways to Start Saving Your Rainy Day Fund

5 Ways to Start Saving Your Rainy Day Fund

We’ve all been in a rut at one point or another - your car breaks down, rent increases or a last-minute costly spend leaves us a little down and out emotionally and in our bank account. With a rising cost of living, it’s hard to know where to start when it comes to saving money and building up a rainy day fund.

Rainy day funds are intended to be able to be accessed quickly and without the repercussions of a long-term savings account like a retirement fund. Ideally, it’s in a high-yield savings account, meaning that your interest off of the money you have placed in there. This isn’t usually more than 1% annually, but it’s better than leaving it behind in a checking account. 

You’ll read different opinions on the amount you should be saving, but as a general rule of thumb, do your homework, understand what you’re spending, what you have coming in, and exactly just how much you need to live comfortably in case of an emergency. As a rule of thumb, this should be around three months of necessary expenses such as rent, groceries, and paying your bills. 

The nice thing is, you can begin building a savings account with your existing income. Here are some pro tips to help your savings journey in small ways that have a big impact over time. 

Make it automatic 

Technology is making it easier to save. Apps like Digit make it effortless to move small amounts of money from your bank account and into a savings account. If it’s automated, it happens without thought and you rarely notice it’s gone. If you need, it’s accessible, but in the meantime, you’re earning interest. 


Make automatic withdrawals similar to how you would with any subscription service. Don't let guilt prevent you from doing this, as your money is still accessible, it's just growing instead of sitting there. 

Track your expenses

Just like automatic transfers, tracking expenses has become effortless as well. Apps like Mint make it easy to see where you’re spending, the hard part is simply having the discipline to face your spending behaviors. Being able to see categories of where your money is going helps you to understand where you need to cut. Are you spending $100 at the grocery store once a week and also spending $100 eating out? Perhaps it’s time to re-allocate funds. If you’d rather eat out, that’s fine, just reduce grocery store expenses so you don’t need to feel the guilt. 

Tracking expenses is also a great way to see where you’ve been spending excessively over a long period of time like forgotten subscriptions.


Prep your Shopping Trips

We’ve all been on a grocery store bender. Aside from never going to the grocery store hungry, it’s important to go prepared instead of on a whim. Whim’s lead to excessive spending, buying more food than you can actually eat in a week, and a shrimp cocktail platter for a party of 20+ people. 

Lists create structure and allow you to forecast what you’ll be spending over the week, plus help you nail down some really killer meals. 

Split your subscriptions with the homies

Here’s where the hard negotiations come in. You have Disney +, they have Hulu, and neither of you should be paying for both. Split these costs with friends to minimize the expenses for all of you. Even if there’s only one thing you want, you can split that cost with friends instead of giving the password away, they can share some of the expense too. By alternating months, you’re responsible for $11 over six months, that’s $66 you’ll be saving over a year by leaning on others to contribute to shared assets. 

Plan for major (or bigger) purchases

We’ll preface this with not all major expenses are “plannable”, like a tire blowout or an emergency trip to go help family, but the ones that you’re able to take into consideration, put it on a calendar. There’s no need to feel guilty about large expenses when you have them planned out, whether it be for furniture, a vacation, or even tuition. By creating an expense calendar, you’ll get a better insight into where you need to cut and transfer spending dollars, rather than being unprepared and needing to put it on a credit card. 

Once you've hit your savings fund goal, it's important to not let saving money slip by the wayside. Short term goals can shift into long term goals, moving on to a retirement savings account. Saving money is an evolution that you're never too late to get started on. 

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