Investment

Do you need a Rainy Day Fund?

The rainy season fund is like an umbrella. On most days, you don’t feel like you need it. But when it rains, you’ll be thankful you have it nearby.

What is the Rainy Day Fund?

The rainy season fund is a collection of personal savings for small emergency expenses. Think of situations like when your car’s tire is flat in the middle of your commute, and you need to tow it to the nearest mechanic for replacement. Or when your air conditioning unit breaks down in the middle of a fierce heat wave, and you need to hire a repairman to fix it before your house turns into an oven.

It is similar to an emergency fund but on a smaller scale. An emergency fund should contain three to six months worth of your income. This large amount is meant to stimulate you in times of great instability, such as when you lose your job or you need to quit to take care of a sick relative. It should supplement your income for an extended period of time so that you can continue to cover important things without worry.

Do you need a Rainy Day Fund?

The usual The American cannot afford the $ 400 emergency by using their accumulation. They have to turn to another solution to cover the cost. If you are one of the Americans in that precarious position, you should start saving funds for the rainy season.

The rainy season fund is the right financial tool to deal with this type of problem. You can use it right away to pay for a small emergency expense (like a $ 400 home repair).

What If You Don’t?

What can you do if you are hit by small emergency expenses but don’t have funds for the rainy season to help you? In that case, you have several options. You can charge the cost to your credit card. As long as your credit card balance is relatively low, this solution shouldn’t cause too much trouble. If the balance is too high, you risk maximizing your card and overloading yourself with payments.

Another solution you can try is a loan. See options for same day business loans through CreditFresh in the form of a line of credit-you can only meet the qualifications to apply for one. If your application is approved, you can quickly access borrowed funds and use them to pay for your emergency expenses. After that, you can direct your attention to a seamless payment process.

How Do You Get Started?

Starting a fund for the rainy season is easy. The first thing you should do is look at your budget to see how much you can afford to save in a savings account each month. If you are not following a budget, you should correct that mistake right away. Download one of the top budgeting apps on your smartphone or computer and follow the instructions.

The next thing you should do is open a savings account. This is the perfect place for your rainy season fund if you have an empty savings account.

After finding out how much you can save each month, go to your checking account. Automate the transfer for that amount to your savings account. This will keep your rainy season fund growing throughout the year.

Soon, your rainy season fund will be full, and you will be ready for any bad weather that may come your way.