Sunday, November 27, 2005

Rainy day funds - saving for the unexpected

It is always important to plan for the future we never know what will happen, loss of job, unexpected home repairs, car replacement etc. An important strategy for life is to start a rainy day fund. I know it is difficult to do when you have to pay for everything in your life and it seems like you never have enough money to meet the monthly obligations. However, whether you set aside $25 per month, $200 or $2000 per month a rainy day fund is important. After your fund gets to a certain size you may want to move it into a long term certificate of deposit.

How to save a rainy day fund
I don't know if you are a disciplined person or not. I always have good intentions to set aside something for the future but it doesn't happen. So I have found the best way to do this is through automatic checking account withdraws. Most banks and credit unions will setup an account for you that can be withdrawn from your account each month. This money is usually available to you through and online transfer or through and ATM or going to the teller at the bank.

If you are successful and the rainy day fund ends up growing to a good size you will sleep a lot better at night knowing that the money is there incase you need it.

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