We all know we’re supposed to do it, yet very few if any of us actually put money aside in preparation for the proverbial rainy day. For most of us it’s perhaps because we don’t really know exactly how to go about it, or we just have a hard time reconciling the saving goal we have with our everyday finances.
I mean there are bills to pay, some of which are paid automatically by debit order as soon as the payday cheque clears and by the time you even start to think about saving some of your weekly or monthly income you have a hard time determining just where all the money went, looking at the little you have leftover.
It cannot be stressed enough how important saving for a rainy day is however, so you have to start somewhere. Here are two simple, practical steps to help you out:
Determine how much you need to set aside
This is where you have to take a long, deep look at your finances as well as your lifestyle and be brutally honest with yourself. Forget what the retailers and advertisers say to you – all they’re trying to do is sell you stuff and they’ll do whatever it takes to convince you that you can afford to buy from them, even when a blind person can see that you can’t.
Now when it comes to affordability, all it really entails to determine what it is you can afford and what you can’t is the application of a simple formula. Most of your income should go towards savings and it this doesn’t have to be forever, but the aim is for you to have enough put away so that it can cover your living expenses for a continuous period of three months should something happen and you’re not able to keep generating your regular income.
If you can’t manage to put that kind of money away, you need to adjust your lifestyle and make an effort to live further below your means.
Devise an actionable, practical plan to prepare for the rainy days
Now think about what it is you’d actually do if the so-called financial rainy day arrived. You should have a plan of action detailed right down to the tee, an example of which is iterating through a list of the steps you’re going to take, like step number one perhaps being that of using your rainy day savings to plough into one of those sure-fire businesses which will generate quick returns. Something like selling fresh produce at the weekend farmer’s market is a good example, but what you’re going to do exactly has to be something which you identified as an option that is practical in your own situation.
Next on the list could perhaps be digging into your savings outright, assuming you’ll be able to recover through your regular source of income, otherwise your contingency list needs to be so detailed that you even know where to get a personal loan to tide you over. You have to be clever and strategic about it though, such as perhaps taking your pick from a specific region which is known to offer the best interest rates on repayments, like narrowing your list down to personal loan companies in Knoxville TN, for example.
It can be really hard to put a real effort into planning for a rainy day when things are going along swimmingly, but with these two mentioned action steps to implement, you can quite easily survive any financial storm which comes your way.