Thrifty Thursday: Rainy Day Savings

Rainy Day Planning--having a financial reserve--other thoughts:

“The safest way to double your money is to fold it over once and put it in your pocket.”  --Frank Mickinney Hubbard.

Cushions are nice things to have when you want to sit down.  Sitting on hard surfaces is ok, but only for a time, after a while, a soft seat is preferable and more comfortable.  Speaking in terms of money, we hope we have a soft seat rather than a hard one to fall onto should an emergency come up.  How do we do this?  Some people feel that because they have money, they should spend it and maybe on things they might not need.  Others have a certain amount that they are comfortable spending to, but once they hit that amount, they limit their spending to the necessities.  Some people, whether their income was doubled or tripled, would still be living at the edge or over their means; others would find their savings greatly increased should that happen.  What kind of person are you?  What kind of money cushion do you give yourself--do you have a financial cushion that allows for those freak (and sometimes often) emergencies--job loss, car repair, medical expense, etc.  Or when these things come along, are you already at the edge of your means and these situations push you over?

Getting a rainy day savings that you are comfortable with will take planning.  You need to determine what you are comfortable with having as a cushion for those rainy days.  I’ve heard of some suggest anywhere from 1-8 months worth of living expenses be set aside for savings for rainy days--and rainy days do and will come-some are more like sprinkles, others are torrential downpours with storm surges to go with them!

Starting out:  determine what amount you want to have for your rainy day savings--a set amount or a percentage of your normal living expenses, or a certain time period worth of normal living expenses.  Budget savings into your expenses.  If you haven’t started budgeting, it is a good time to start.  At first your savings will be small, but over time through consistent effort, it will grow.

Determine what emergencies are worthy of using this savings--Is it an actual emergency or can you do without for a little while until you have enough to pay without using rainy day savings?  Example:  a car repair is pretty much necessary if that is your only way to work--which is your way of even having an income; but if the toaster breaks, perhaps repair or replacement could wait until it can be budgeted in with your normal household expenses (and you have time to find it on sale if possible).

I hope these thoughts and ideas are helpful.  I think most of us, if not all of us, know the basics of using our money better and saving, but sometimes it is helpful to hear it again to remind us and get us back on course.

"The first step is to begin.  The second is to continue.  It doesn't matter how fast we get there so much as that we begin and continue according to our abilities."  --Bishop Burton (This quote was in a home storage article: "Family Home Storage:  A New Message" Ensign, March 2009, p 60)