As the cost of living rises, it can be difficult to prioritise saving up for a rainy day fund. However, His & Hers takes a look at why it’s well worth putting aside a little each month if possible.
Preparing for the unexpected
Almost all of us will have experienced the stress of being faced with an unexpected event at one time or another. Whether it’s an injury, a cracked tooth, or simply your TV or laptop unexpectedly breaking, having a rainy day fund in place means you’ll have the budget in place ready to pay your dental bill or personal injury claims costs. This means you’ll be able to request the help you need immediately – whether that’s from a dentist, a lawyer or a mechanic – without having to adjust your budget.
Giving you peace of mind
Nick Hill, money expert at the Money and Pensions Service told The Independent: “One in three [households] say thinking about their financial situation makes them feel worried, and nearly half admit they don’t feel confident in managing their money day to day.”
If you regularly find yourself worrying about money, taking practical steps – such as setting up a rainy day fund – will help you feel more confident in managing your money. Even if you just set aside a small amount each month, your savings will soon start to add up.
Spreading the cost
It goes without saying that one of the reasons people struggle with unexpected expenses is that they haven’t had time to save and spread the cost. This can mean using a loan or credit card in an emergency, potentially adding substantially to the overall cost once interest payments have been added. By building up a rainy day fund, you can set aside a small amount every month, so you don’t feel the pinch. If you don’t know where to start and you’re not sure how much you can afford to save each month, there are plenty of easy to use budgeting tools available online that will help you get started.
Helping you to focus on what’s important
When you’re dealing with an unexpected life event, the last thing you need is added worry about how you’re going to pay for it. Having a rainy day fund in place when it’s needed will mean that you have one less thing to worry about, helping you to focus on what’s important. Also, this means that once you’ve put the emergency behind you, you can move on more quickly without having to pay for the unexpected event for months to come.
If you have any tips for saving that have worked well for you over the years, we’d love to hear from you. Please share your top savings tips in the comments, or via our social media channels.
We’re very proud to bring you this feature in association with Hodge Jones & Allen. For more features, please pay a visit to our lifestyle page.
