If you’ve ever had to apply for an emergency loan from your bank or alternative lending institution, then you may have a better appreciation for the importance of creating and building a rainy day fund. If you don’t have a rainy day fund, it might be a good idea to start. Rainy Day funds are typically used for emergency car or home repairs and unexpected expenses. If you are struggling to set a little money aside every paycheque to use in case of emergencies, here are a few tips to help you out.
#1: Sign up for an Automatic Savings Program
One of the hardest things about saving money is making it a habit. We often forget or use our funds for other important expenses. The trick about saving for your rainy day fund is to treat your savings like a bill so that you are less likely to see it as an “optional” expense. One way to do this is to set up automatic payments into a savings program so that you don’t have to think about it. That way, every time you look at your bank account you’re surprised by how much money has accumulated.
#2: Cut back on Take Out Coffee
If you buy one cup of Starbucks coffee a day, you’re spending roughly $125 a month on takeout coffee. Do yourself a major favour and skip the Starbucks line. You’ll save a significant amount of money if you bring your coffee from home. Instead of using that extra five dollars a day on something else, why not reallocate those funds to a savings account?
#3: Bring Your Lunches to Work
Speaking about spending, if you buy your lunches every day, you’re spending $2000 a year on a single meal that’s typically depleted of nutrients and chock-full of trans fat and other flavour boosting chemicals. Save money and increase your nutrient intake by bringing healthy snacks and sandwiches to the office.
#4: Don’t Spend More than You Make
This simple statement is the underpinning issue behind everyone’s debt. Not spending more than you make is difficult when you have a credit card or line of credit. No one is perfect, and we don’t expect you to get it right every time. But as long as you make a conscious effort not to spend more than what you earn, you’ll likely find yourself resisting unnecessary purchases, which is an automatic money-saver.
#5: Start a Jar
Money-saving guru Gail Vaz-Oxlade suggests an easy way to save money: magic jars. This simple trick allows you to budget your money based on cash you put in a special jar labelled specifically for certain expenses, such as groceries, entertainment, and bills. When the money in the jar is spent, you will have to wait for the following week to spend money on that type of purchase. Magic jars teach chronic spenders how to budget their spending and to visualize where their money goes and how quickly it disappears. Putting a jar on the counter for your spending will help you visualize how much money you’re saving, which may help you continue the habit.
For the times when dipping into your rainy day fund just isn’t enough to help you out with unexpected expenses, use LoanConnect. We are Canada’s number one search engine for lending organizations, and we’ve helped out Canadians all over the country in financial emergencies. Learn more about how it works here.