Saving for a rainy day is a smart move – it seems like there’s always something that requires you to part with your hard-earned cash, whether it’s your car’s refusal to move any further before you replace several costly parts, boiler breakdowns or other unexpected headaches. Starting on the path to savings isn’t always easy, however.
First things first, how much should your fund be? Some financial experts say your rainy day fund should be equal to six months of essential expenses. It may seem like a lot, but in the long run having a relatively sizeable fund could help you negotiate a broken appliance or the loss of a job.
Next up – you need to develop a plan. Once you know exactly what’s coming in and going out, you can identify the best areas to make cuts. Do you really need that Costa coffee every day, and could you take the bus into work instead of your car? Maybe forgo that admittedly well-made Centra sandwich for a packed lunch? Saving €2-3 per day mightn’t seem like much at first, but this can add up to €40-60 per month and €480-720 per year.
Establish a savings account to keep your rainy day fund separate – if it’s in your regular bank account then you might just be tempted to dip in every now and then. Bonkers.ie have a handy savings account comparison tool. Don’t forget your local Credit Union either.
Still unsure about what or where you can save? Don’t be afraid to ask for help. The Money Advice and Budgeting Service (MABS) for example has some great money saving and budgeting ideas, handy to kick start your rainy day fund. And there’s a big, wide world out there on the internet, full of useful bits of advice to make your savings plan run even smoother.