As a single income household, having a rainy day fund to help straighten out life’s curve balls…..is very smart. It sounds like you a pretty good a pinching a penny. I agree with Spenderella….a payroll deduction or automatic transfer to your savings account is the way to go. Try changing one spending habit in your life, such as buying one less soft drink per day or one less bag of chips. This will help provide some extra cash for this goal.
A rainy day fund is exactly what I’m saving for… you never know when you’ll need it and it makes life easier knowing I’ll have something I can fall back on when “life” happens. Like Spenderella suggested, I’m going the direct deposit route… although it’s awfully tempting when I see that number creeping up to use the savings for a credit card payment. My next step will be to put some of it into something that gives me higher interest… like a short-term CD so I can have access to it in a few months time.
There are a ton of theories on how much to save for an emergency fund. Suze Orman, for example, suggests that your emergency fund should total 8 months worth of household expenses. Kiplinger’s Kimberly Lankford suggests saving 3-6 months of living expenses. To me, it’s all in what removes your anxiety. If only having 3 months of living expenses stashed away keeps you up at night, keep saving. If you feel really comfortable having 6 months of living expenses in a savings account, start saving for something else. The goal should be to protect your family and your peace of mind. Let that be your measurement of success.
This blog asks a simple question: "What are you saving for?" Its goal is to help people set savings goals, develop a disciplined and/or systematic savings habit, and build a corresponding community of like-minded people as a support network. By laughing, crying, and discussing how we each approach this topic together, we should find it much easier to save together. So what are you saving for?
An emergency fund is a very worthy savings goal. It’s hard to plan for costly emergencies in the future when you have to pay the bills and feed you family today. Try putting at least $10 a paycheck into a savings account and forget about it. Even better, have that $10 taken out automatically with direct deposit. In time you will build a cushion of extra cash for emergencies.