Saving for a "Rainy Day": Why Is It Important?
We've all heard the age-old saying "save it for a rainy day" in regards to some leftover cash or some pennies you found in your old jeans.
But what is a rainy day?
And is it really that important?
What it all comes down to is building up a fund (more than a few pennies) in preparation for a period of future need, a time when you really need the money; as opposed to this week, month, or even year.
However, the question we end up asking ourselves surrounds the reasons for saving. We know we're preparing for something, but for what exactly?
Assuming that it's strictly an emergency fund only, the possibilities are endless (as scary as that sounds). It could be a broken appliance, some needed time off work, car repairs, or you might never even need the emergency fund at all.
These doubts make it incredibly hard to save up consistently. It's hard enough with a goal in mind... but without one? It takes some willpower. Therefore it's important that we establish the right frame of mind from the get-go on the build-up to this rainy day, so for when it arrives, we come prepared. Besides, it's better to be safe than sorry.
1) Set a monthly savings goal 📈
We all know the importance of budgeting month after month. Whilst you've often got a goal in mind; that summer holiday or that huge birthday celebration, we must remember to save that little extra for the necessities, despite how much we may want the luxuries.
Whilst this is difficult to maintain, the best way of persisting with the commitment is utilising the technology which is there to help you.
Struggling to budget your spend? Use budgeting apps.
Don't trust yourself to leave the money unspent? Set up a direct debit into a separate savings account.
Struggling to see where your money's going? Track your spend with spend insights.
Devise a plan for your savings in collaboration with the tools at your fingertips, and you'll feel more in control of your spend than ever before.
2) Keep the change 💰
Sounds obvious, right?
Be honest, how often have you made a purchase, no matter how small, with the primary motivator being to "use up the spare change"; where there's not much purpose behind the decision other than just because you can? The vast majority of us are predominantly card users now - sometimes we can just see some spare change as being a mere inconvenience. We've all been guilty at some point or another.
Imagine "using up your spare change" once every few days, equating to around £5 per week.
Keep this up throughout the seasons, and that's a total of £260 per year of unnecessary spend that could've gone into the emergency fund.
Keep the change. It all adds up!
3) Save your unexpected cash flow 🎉
That satisfying cash boost that pops up on occasion - whether it be a bonus at work or a text rebate - is definitely among the nation's most pleasant surprises. An influx of cash on top of your normal paycheck. What more could you want?
So what to do with this extra cash? The likelihood is, without this influx, you had already figured out a budget to guide you through the month, so you won't actually need the extra 💷.
So the choice is yours... treat yourself to that designer clothing you've wanted for months, or add the cash to the rainy day fund? Or, even better, find a compromise between the two - everyone deserves a treat every now and then.
4) Get rewarded for your spend 🏅
With the hundreds of apps, tools, tips & tricks readily available to you today, you can easily save money on your day-to-day spend, potentially equating to a substantial amount at the end of the month.
With a little dedication and practice, you'll be surprised at how much you'll be able to save.
Make the most of your rewards 💳🏆
Many shoppers carry the assumption that tracking and monitoring rewards doesn't warrant their effort or time. The reality though, it's a lot easier and worthy than they think. Being tactical and strategic on how you earn rewards can lead to a substantial amount of savings whilst having fun on the process seeing the rewards points grow. Check out HeadForPoints for information on how to manage your rewards effectively.
Download grocery saving apps 🛒🍎
As much as a pain as it can be at times, food shopping is one of life's necessities. Due to this, it leaves huge saving potential on a consistent weekly basis. If there's anything you want to begin a saving commitment with, we recommend it be with your local supermarkets. You won't stop spending on food anytime soon!
Browse the web for potential discounts for your next recreational purchase 👔👠
Being caught in two minds about whether to buy a product is bound to happen every now and then. Does it offer value for your hard-earned money? Sometimes, with a little research, all we need is some reassurance that the price is better elsewhere for us to finally make the decision of a purchase. Not only have we saved money, but we also feel like we've got some value out of the product. HotUKDeals is the go-to site to find the best discounts, as well as Pouch - a quick, convenient voucher seeker as a free browser extension.
Track your savings 📈💰
Each time you make you make a discounted purchase that you otherwise would've missed out on beforehand, make a note of the amount you saved. Find a sum of the figures at the end of the month and relocate the stash into your rainy day fund.
Admittedly, carrying out these steps consistently and efficiently takes some effort, and definitely takes some getting used to. But otherwise everyone would be doing it, right?
5) Continue Educating 🔍
You may be savvy with your budgeting apps and are able to analyse your spending behaviours inside out, but it's important to remember that the financial world is constantly changing and there is always room for improvement.
Surf the web to stay updated with the latest tips and tricks, gain perspective from others and continue to develop when managing your finances. There's always room for improvement and growth, and with the vast amount of information across the internet, you're able to do just that.
Now for the fun part...
6) Watch your savings grow 🤑
Nothing yells motivation like watching your balance in your savings stack up and grow exponentially. Like anything, if you're committed to working on something and you recognise the results paying off, it's a great feeling which only causes you to strive for even more improvement.
After they've been transferred into your separate account, don't ignore your savings. Track your progress, how much saved this month vs. last month, if you're meeting your budgeting goals and any other relevant metrics.
The more you practice and track your progress, the more you will learn and gain a further insight into your spending patterns and saving techniques.
Oh, and did we mention that using Curve is a no brainer to help you achieve the points mentioned above?
Curve is the only card you need to carry. It simplifies your financial life by connecting your accounts to one smart card and one even smarter app. Click here to sign up for free 💳📲
Got a favourite saving technique that we've missed out? Let us know! We'd love to hear from you 👇