April is financial literacy month! Throughout the month we are going through 30 tips to improve your overall financial wellness.
A rainy day fund is your first line of defense when things aren’t going your way. It’s there for the small bumps and surprises in life that can turn into major headaches if you are not properly prepared. That’s one reason why it’s been highlighted that a rainy day fund is as crucial as emergency savings.
According to the Federal Reserve, nearly half (47 percent) of Americans would not be able to cover an unexpected $400 expense without borrowing or selling something.
If you feel nervous about being able to cover an unexpected expense, just know that you are not alone. You are seeking out advice and trying to figure out how to fix the situation. You are taking the right steps!
The bottom line is this – start small. Start with anything you can and contribute to your rainy day fund as often as you can. Set up a plan, follow it, and watch your rainy day fund grow from there. As we highlighted yesterday, take a look at your normal expenses. Cutting out something that seems small and reallocating that cash to a rainy day fund can have a major impact.