8 Ideas to Save for a Rainy Day

September 10, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nothing can destroy a budget more than unwelcomed financial surprises.  You have spent numerous minutes to hours getting your budget in check and mathematically sound.  All of a sudden a family member calls to request financial help, your automobile needs mechanical service, or worse yet--home damage.  

 

Several years ago after moving into a new home in San Antonio, a vast amount of rain poured very heavily flooding the master bedroom and bathroom.  The building construction next door had changed the landscape forcing thousands of gallons to seep through the walls ruining hardwood floors, sheetrock, and much more.  My $10,000 emergency was very UNWELCOMED!

 

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Below are several easy ways to start saving so in the event financial distress occurs in your life, you can at least remove the financial burden and reduce the stress from the situation.

 

 

1.  Make it a habit to save money

 

If you are not currently saving a predetermined percentage of your paycheck, then start sooner than later.  Typically people are not saving because they are either not taught or haven’t been conditioned to save money.

 

When paychecks are deposited into your bank accounts, there are a million reasons why every dollar needs to be spent (groceries, bills, presents, etc).  The real reason is because you don’t value the future benefit of saving money. You find more value in being sure bills are paid. But looking beyond this false belief, you will find that with some minor adjustments to your lifestyle, it is easier to save money than you think.

 

If you struggle in saving money, start small.  The purpose of this article isn’t to punish you or to make you feel bad.  It is to encourage you and motivate you. Your goal for the next paycheck is to save $5 each paycheck without having to touch it.  The key is starting small and then increasing it with every paycheck.

 

As you are reconditioning your mind, you will be amazed at how simple and easy it is to start saving.  This leads to point number 2.

 

 

2.  Don’t touch your savings

 

This is the most crucial step in saving money and is where most people falter.  Saving is easy. Not touching the amount you have accumulated is extremely difficult for people.  

 

When you leave your savings to commingle with your checking account, it can easily be touched or spent.  You must make it difficult to spend any and all amounts saved. Try moving it to a savings account of your local bank or try opening an account at another bank.  I recommend USAA since this company has terrific customer service and offers a free checking account.

 

 

3.  Use Robo-apps to build money

 

Technology has made it easier than ever to save money while reducing the pain.  Qapital is one of those apps to make saving money easier. The process is simple.  You identify your bank with Qapital (it’s secure). You set targets within the app identifying how Qapital should build your savings.  

 

The way I do it is I have Qapital round every purchase I make to the nearest dollar.  It then takes the difference and deposits it into an FDIC secure account held by Qapital.  You maintain full access to your money and can withdraw at any time with no fees! That’s my favorite part.  

 

Qapital earns money with interest by holding your account in escrow.  You pay no fees and earn no interest. It is your money.

 

Another favorite of mine is using Ibotta when I shop.  This app makes it too easy. When I shop, I open the app and find my favorite stores--usually Amazon, and make purchases through it.  Any coupons that Ibotta finds or rewards, Ibotta will deposit that into an escrow. My savings builds until I am ready to cash out.

 

You will not get rich from these two alone but these are tools to assist you on your journey.

 

 

4.  Pay yourself first

 

Now ask yourself, “What is the first thing you do when you are paid?”  Most people I discuss this with will usually answer “I pay bills”.

 

Practice paying yourself first.  If you are already doing this, then congratulations.  If you are not practicing this, then start small by paying yourself 2-5% of your paycheck.  This is not money to squander or to spend. It is money you must put away into a piggy bank or savings account.  It is your “Rainy Day Fund”.

 

Once this becomes a regular practice, slowly increase the percentage.  Your goal over the long-term is to eventually reach 20%. Sounds unrealistic but it is very doable.  I write “long-term” because this is a goal to reach 10-15 years from now. Most people usually cannot save this much right away because they are paying off bills and stretched thin with money.  

 

 

5.  Minimize expenses

 

Lowering your expenses can be extremely difficult, not impossible.  It requires patience, time, and shopping around. I recommend the first place to start is shopping around with insurance.  It is the easiest place to find savings. Use the amount you are currently paying as the benchmark and go from there.

 

For renters insurance, I recommend USAA Renters Insurance.  For other comparable quotes from Home Insurance, Renters, and Auto you can review the rates with Allstate, eSurance, or eHealth Insurance.


 

6.  Sell unwanted items in your garage

 

This may be obvious to you, but we make excuses not to clean out the attic or garage.  Odds are you can sell over a $1,000 worth of stuff you aren’t using. If you are looking to jump start your savings account, what better way than to clean out your garage and receive money in return.  

 

If you need assistance in getting heavy bulky stuff out of the garage, then I recommend hiring some assistance.  I use Task Rabbit because the company vets and screens all applicants prior to you hiring them and the cost is very reasonable.  Use this hyperlink for a $10 coupon towards any service in Task Rabbit.

 

I used this service to help me move furniture and I paid around $80 for several hours of assistance.  It was worth it!

 

 

7.  Monitor your utility bills

 

A budget item that consumes your budget are utilities.  During the summer, the electrical bill is high because your A/C is constantly running and during the winter, your heat is burning gas or electrical.  

 

On my first “To-Do” list after moving, was to purchase and install a new thermostat that was wifi enabled.  I have wasted so much money by forgetting to adjust the thermostat. When your heat or A/C run, it is charging you money.  

 

My two favorite thermostats because of functionality and ease to use are Nest Learning Thermostat and Honey Smart Programmable Thermostat.  Since I travel quite a bit, it saved me money by checking the weather and then adjusting the thermostat as I saw fit.

 

 

8.  Meal prep for lunch & dinner

 

Consider taking your lunch to work and meal prep for dinner.  This forces you to organize and prep meals on the weekends saving you money during the week while reducing any last minute impulses, usually equating to spending money.  Even replacing just one lunch meal during the week can save you about $40 a month or more.

 

Because nobody can plan for emergencies, it is always best to prepare for the worst.  By slowly building your savings, you can help reduce the financial stress of last minute financial burdens.  I hope these tips above have helped you. If you have great ideas on how to save money, comment below to share those with our community.

 

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