How to save some cash for a rainy day
Every now and then life can throw you a nasty surprise. Receiving an unexpected expense is never easy, but by building an emergency fund you can rest assured that you won’t have to worry about where you’ll get the money to pay for it.
What’s an emergency fund?
- Also known as a rainy day fund, an emergency fund is a little stash of cash you set aside to help cover the cost of any urgent and unexpected expenses.
- This could be anything from an unexpected medical condition, a car break down, or the need to buy a new washing machine.
Think you can’t save?
You can! The trick is to start small, and save regularly.
- It doesn’t matter how much – or how little – you save, you just need to make a start, and then keep going.
- Saving as little as little as $10 a week means you’ll have $520 by the end of the year. That’s a precious buffer and the start of a solid amount of savings.
- Got an amount you’d like to aim for? Use this Savings goals calculator to see how quickly you could reach your savings target.
Put your savings on auto pilot
The best way to save is to remove any excuses and just put things on ‘set and forget’.
- Open a separate high interest savings account and set up regular automated transfers you’re your regular bank account. Look for account options that offer you bonus interest when you only make deposits, and no withdrawals.
- Or if you earn a wage, ask your payroll department to split a small amount of your pay into this separate savings account.
5 easy ways you can save cash every day
- Work out where your cash is going
- Either use a notebook to record every cent you spend, or use an app like TrackMySPEND. You’ll quickly see where you might be overspending, and identify some areas where you can save some cash.
- Keep your impulses in check
- Most of us are guilty of giving into a whim and buying something unnecessary every now and then.
- Tracking your spending will help keep you honest, as will remembering that every dollar you spend is one you can’t save.
- Check out these handy tips on how you can beat the urge to splurge.
- Coins count!
- Get yourself a jar and empty all of the coins from your purse and pockets into it each day.
- You’ll be amazed how quickly those cents become dollars, and make a valuable addition to your emergency fund.
- Set a budget
- Bag any bonuses that come your way
- Save any extra cash that comes your way.
- Got a tax refund? Score a cash gift from a friend? Add it to your emergency fund and watch it grow!
So, what’s an emergency?
Be careful here. Spotting a fab pair of shoes or wanting the latest iPhone doesn’t constitute an emergency!
- Don’t let all of your hard savings work go to waste. Make sure you keep your emergency fund for those moments where life throws you a big curve ball, and you really need the cash to see you through.
- Imagine how much better you’ll be able to face one of life’s little emergencies when you know you’ve got a small stash of cash on hand to help.
- You can then focus your energies on dealing with the problem rather than worrying about how on earth you’re going to pay for it.