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Rainy Day Money

How to save money piggy bank

How To Save Rainy Day Money

To answer the question - just what exactly is rainy day money?

Well, to put it succinctly, it is money you save for that time that always comes - when something unexpectedly goes wrong, and you have an urgent, unpredictable, and immediate drain on your finances.

Rainy Day Money, for example, could be money saved for when you have an illness and are unable to work. It could be money saved for when you have an accident, whether that is an accident to yourself, to your car or to your home. It could be money saved for something unexpected such as a redundancy or a business failure - essentially it is money you put away to tide you through an unexpected sudden demand on your financial resources.

The key word is unexpected - we can all plan for the expected expenses in life - paying for living expenses, children’s education, health and home insurance, holidays - but there are ALWAYS additional expenses that are unexpected - and it is for this reason that we have the saying “to save for a rainy day”.

Note: Various online definitions for “save for a rainy day” define the phrase as reserving something, usually money for a future time when it may be needed - succint!

So how much should be put aside for a rainy day? Advice as to how much to save for the unexpected usually ranges from three to six months of your earnings, and some say you should have savings that would allow you to pay your own way (without a salary) for a year or more. You need to decide how much to have saved for yourself depending on your own personal circumstances.

Rainy day savings can be important too, when you are managing your finances and budget well, you are organised financially, you have set a budget, and you have your income allocated exactly each pay-day. Allowing a little to be put away into rainy day savings will give you a buffer where you can dip in and out for additional funds should the need arise.

Saving for a rainy day is good financial discipline. It allows you to weather easily the little financial hiccups that may suddenly occur as well as enable you to be better prepared and more likely to survive the big, sudden and unexpected financial demands. An additional bonus is that you can use a rainy day savings account as the first stop for your money and pay it from there into other longer-term and higher interest bearing saving accounts.

So to sum up, rainy day savings are emergency savings - and they are essential to cover the unexpected drains on your financial resources that may crop up from time to time - the rainy day money and savings you put away now will be there when you need it.

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Save Money Hints and Tips

Here are some bite-sized and easily read finance and money pages at ieke, to help get you started on saving your hard-earned money and creating future wealth and prosperity for you and yours. I have written these pages myself, and they are all original and unique content... ENJOY!

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