Creating a rainy day fund
Posted on December 21, 2022
We know that life is can be very unpredictable. Some days aren’t all sunshine, like when your car breaks down or your home needs an emergency repair. These situations happen to everyone. Creating a rainy day fund is a fund that kicks in for an urgent or unexpected expense that you haven’t accounted for. This could be car repairs, unexpected travel or an urgent vets bill.
It provides a financial safety net so you don’t have to borrow money if something happens to you or your family. Having a rainy day fund available will give you more financial control and peace of mind. Read our tips below on how you can get started on your rainy-day fund.
Setting aside money for a rainy-day fund is fairly simple and definitely worth it. Here are a few steps to get started:
Evaluate how much you need for your rainy day fund.
Take a look at your needs and budget and determine how much you should set aside for a rainy-day fund. Ideally, you should have enough for 3 months of bills. That can be a daunting number, so maybe just start with a small goal of a months worth of bills, and build from there.
Open a dedicated rainy-day savings account
A great way to start is to set up a specific account where money is set aside. Check out how you can set up your own account with our credit union, to start your saving journey.
Start building your rainy-day fund slowly by contributing a small portion of your wages or benefits. You can save via Payroll deduction straight into your Credit Union account. It can be as small as £10 per month, or you can set it up weekly if that suits you better. Find out more about savings straight from your pay.
You can adjust how much you save into your rainy-day fund. If you have more expenses in one month, you can reduce the amount set aside and if you have a little more left at the end of the month you can put some towards your rainy day fund. You can do this via Standing Order from your bank, or by paying in when it suits you via faster payment. Saving with our credit union gives you the flexibility to save when you can.
It’s a good idea to regularly check in on your rainy day fund and replenish the funds whenever you dip into it. We have online banking, so you can check on your account whenever it suits you, or call us on 03336 000690 to speak to our helpful telephone team.
When to use rainy day fund
While your rainy-day fund should be easy to access, it’s very important to only use it for a real emergency. You should keep your fund to cover expenses when:
- You need to pay something quickly
- It can’t wait for a few weeks to save up and pay for it
- You have no other money available
You can make a withdrawal from your Credit Union account by calling us on 03336 000690 or via Online banking, we aim to complete all withdrawal requests within 2 hours.
We can help if you need money before your rainy day fund is built up.
We offer small loans for unexpected emergencies, should you need funds before you have been able to create a rainy day fund. You can save while you repay your loan, so you can continue on your savings journey while repaying your loan. Find out more about our ethical affordable loans.