Are you the kind of person who lives paycheck to paycheck? Are you the kind of person who doesn't even have enough money in your savings account to buy a soda pop? Are you the kind of person who can't afford a "rainy day" because you don't even have the money saved up to buy an umbrella?|&&|Sadly, there are too many people who can answer yes to one or more of these questions.
Because you never know what tomorrow is going to hold, everyone needs a rainy day fund. While there are hundreds of opinions on how to go about this, two sure ways to start your rainy day fund that never fail are both practical and simple. The best planning experts agree, when it comes to saving money, you don't need gimmicks, you just need solid plans that work.
Have a penny, save a penny
While some may scoff at saving change, a mother of three from Georgia related how, by paying for all of her transactions under $20 with cash rather than plastic, she saved a ton! Each time she made a purchase, she dumped the loose change in her purse. Sometimes it was a few cents, sometimes nearly a dollar. Each week she deposited the change from her purse into a jar and, after a year, she had saved $889.18. It may not sound like much, but that was quite a haul considering this was the equivalent of a mortgage payment.
Don't get lost in a forest of plastic
Cash is king! Many people hardly realize the amount of charges they rack up each month by opting for the convenience of credit and debit cards. Many financial institutions and stores charge for transactions, or only offer a small amount for free. POS (Point of Sale) transactions often cost 25 cents each. Transactions at an ATM not owned by your bank can incur a charge of up to $6 after the charge your bank and owner of the machine are imposed. If you add up those savings and siphon them into a separate account each month, as a Massachusetts man did, you can start a rainy day fund without any real effort.
The key to starting a rainy day fund does not have to be going out and making more money, it can be using the money you already have more wisely. By understanding where the waste in your budget is (keeping a transaction journal for a month), you can make changes which allow you to save money -- so that when the rain does pour down, you have an umbrella in place already.
When tough times hit, it's hard to know where you need to tighten your belt, but these tips on saving money can help you get started.
Christmas Club savings accounts: many credit unions and banks have them, but are you taking advantage of this valuable budgeting tool? If not, it may be time to start.