We all know how it goes when the car breaks down and needs ‘significant’ repairs, or the dog swallows something he shouldn’t have and is rushed to emergency – you need to access cash quickly! But while saving our pennies for a rainy day is something we should all do, it’s not always easy to save for those unexpected expenses (especially when there are so many day-to-day bills to pay).
If you’re finding it hard getting your rainy day savings started, there are some tactics you can try. Here are our top tips for getting off to a flying start.
1. Get a goal in mind
The tricky thing about rainy day saving is that you’ll never have a particular goal in mind – so it’s hard to stay motivated. What can help, though, is to have a figure in mind. This way you have a target to shoot for (and you can high five yourself once you’ve reached it). So how much is ‘enough’ for you? When you’re figuring this out, think about things that have happened unexpectedly in the past, and how much they have cost. Also, think about the day-to-day expenses you would need to cover if (for example) you lost your job. An old rule of thumb is that you should have enough to cover you for six months… but we know that may be a big ask, so pick a figure that you think you can achieve.
2. Create a savings habit
It’s great to have a target in mind to get you motivated, but when it comes to saving, habits are what keep you going. With this in mind, make a commitment to yourself to deposit an amount every week or month (whatever works best for you) into your rainy day fund. It could be as little as $25 or as much as $200 a week, it doesn’t matter – as long as you stick to it, it’ll add up over time. Just make sure your commitment is realistic, or it’ll be impossible to keep.
3. Set it and forget it
Saving is definitely easier when you don’t have to think about it. So why not ‘set and forget’ by asking your employer to pay part of your salary into a separate savings account (AKA the emergency stash). Trust us, if the money is out of sight, it’s easier to put it out of your mind (until you really need it). And of course, if at any stage you need to use these funds, they’re there waiting for you.
Another tactic is to set up a recurring direct transfer from one of your accounts into another, straight after pay-day. It also helps if you don’t carry the card that’s linked to that account around with you too.
4. Make a list of what you consider an ‘emergency’
It goes without saying that all ‘emergencies’ are not created equal. If you dip into your rainy day fund to pay for an ‘emergency’ designer outfit or mini-break, you’re unlikely to have enough left over for the actual emergencies like a plumbing crisis or a medical necessity. Get a clear picture in your head of the type of things your rainy day fund is really for, and make a commitment to yourself to only withdraw when you absolutely have to. Don’t forget, the longer your savings stay untouched, the more interest they’ll be accumulating!
The information is current as at publication. Any advice on this website does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. Deposit products, savings products, credit card and home loan products are issued by ING, a business name of ING Bank (Australia) Limited ABN 24 000 893 292, AFSL and Australian Credit Licence 229823. ING Living Super (which is part of the ING Superannuation Fund ABN 13 355 603 448) is issued by Diversa Trustees Limited ABN 49 006 421 638, AFSL 235153 RSE L0000635. The insurance cover offered by ING Living Super is provided by Metlife Insurance Limited ABN 75 004 274 882, AFSL 238096. ING Insurance is issued by Auto & General Insurance Company Limited (AGIC) ABN 42 111 586 353 AFSL Licence No 285571 as insurer. It is distributed by Auto & General Services Pty Ltd (AGS) ABN 61 003 617 909 AFSL 241411 and by ING as an Authorised Representative AR 1247634 of AGS. All applications for credit are subject to ING's credit approval criteria, and fees and charges apply. You should consider the relevant Product Disclosure Statement, Terms and Conditions, Fees and Limits Schedule, Financial Services Guide, Key Facts Sheet and Credit Guide available at ing.com.au when deciding whether to acquire, or to continue to hold, a product. Before interacting with us via our social media platforms, please take a minute to familiarise yourself with our Social Media User Terms https://www.ing.com.au/pdf/Social_Media_User_Terms.pdf.