It is a common phrase that we all hear from time to time. But what is actually meant by the idea of saving for a rainy day? For many people, the idea of saving for a rainy day is where you put money aside every week or month, small amounts that can build up. These funds can then be used to tackle something that life throws at you. Or perhaps for a much longed for treat.
Saving can be hard, especially if you are already feeling a financial strain. However, we believe that by following our top tips on saving for a rainy day, you can soon find yourself with a lovely nest egg that could have some real positive implications.
Decide where you are going to store your cash
Before you start saving you need to decide where you are going to hide away all that lovely cash that you have saved. Whilst you may be tempted to simply hide it away in a shoebox, this is far to easy to dip into, and you won’t be gaining any interest.
That said, as it is designed to be a fund that you can access when you need it, you won’t want to put it somewhere that you cannot simply withdraw it from.
There are plenty of savings accounts out there that not only allow you speedy access to your funds, but also give you a good interest rate on what you save too. Find one that is the best of both worlds and you can make the most of how much you can save each and every month.
Consider bringing some extra cash in
Many of us seem to be getting by month after month, with very little left over from our monthly or weekly wages. If this is true for you, then you may not think that saving each month is a realistic goal.
Rather than dipping into your wages, why not see if there is another way that you can raise extra cash? This could be by selling some things, a more one off approach, or perhaps setting up something more regular, such as overtime or extra work.
This should take the edge off of having to save every month.
Cut back on your spending
Now, we are not saying that you should do away with all of life’s luxuries. But you may find that you can replace these with lower-cost options instead. There are simple, yet inventive ways that you can lower the amount that you spend out.
Have an expensive TV package but end up watching most of your TV on catch up? You may be better off switching to Freeview and combining this with a streaming subscription or some of the free players that channels offer?
Spend a lot of money eating out with friends? Take turns to host dinner/wine nights and you could put the money you would spend into your savings pot.
In doing this you won’t feel that you are pinching the pounds, but you can soon see them build up and there is no better incentive than the realisation that your efforts are paying off.
Not all gestures have to be big ones, this is particularly true when it comes to personal finance. Whilst you may have grand ideas of saving £200 every month, the reality can soon hit you that this simply isn’t possible.
Rather than becoming disheartened that you are not meeting your targets, start small and you can always build up.
Tell yourself that you are only going to save £50 per month, and if it happens that you have some more money to put away, you can do it then. If you do have slightly higher targets than £50, you could always break them down into smaller, perhaps weekly chunks. Meaning that you won’t feel the burn quite as much as putting away a large chunk.
One big problem of a rainy day fund is that it stays that and never gets spent. The idea of these savings plans is that you get to enjoy it in the end. Whilst they can come in useful for unexpected bills or purchases, you can also choose to use them to buy something that you wouldn’t otherwise justify.
This could include a new TV, or perhaps the games console that you have been coveting. The good thing about this, is that you have put the money away all by yourself. Any purchases that you make is without borrowing further money, and you won’t end up in debt!
So, there you have it. Our guide to getting together your very own rainy day find. Whether it is £10 per week or £100 per week, saving, even just a small amount every month is a fantastic way to limit your chances of getting into debt.
Whilst borrowing can be great for life’s big expenses it does have its drawbacks. In fact, debt can soon spiral out of control and you may find that you need to arrange for an IVA or a Protected Trust Deed, just so you can get a handle on what you owe.