Your “Rainy Day” Account

When you hear the phrase “When it rains, it pours”… most times we relate that to our financial lives. I know it seems like when the refrigerator goes out; it’s also time for new tires and a transmission. Or when the medical bills come in the dental bills follow right along.

For those with children, it’s like all of their field trips and sports fees are due on the same day as the lunch tickets.

In this tip, I want to help you build a “Rainy Day” Account, that can be used to cover unexpected expenses.

First, set up a new savings account with your primary bank or credit union.

Next, review your cash flow and determine how much you can afford to contribute each month, after paying all of the bills and expenses, going into this Rainy Day account.

Now, make it automatic by asking your bank or credit union to automatically draw out a specific amount each month or from each paycheck, and deposit that amount into your Rainy Day Account.

How much should you have in your Rainy Day Account? That depends on your monthly expenses.  A general rule of thumb is 3 to 6 months of living expenses.

I know it may be tough to put away that much money at once, so just get started by saving up 1 month’s expenses first. Then go for the second month, and the next and the next. The most important thing to do is get started today.

I’m Alan Akina… Remember, every dollar counts.

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