The economic crisis of 2007-08 made a lot of people
realize the importance of having a rainy day fund. But even after a good five
years after the recession, not many people have worked on improving the state
of their finances. Most people are living paycheck to paycheck, and have
nothing to fall back on in case things go awry. However, it is never too late
to start saving for a secure tomorrow. The below mentioned points will guide
you on how to go about saving for a rainy day fund.
Do
an Assessment of your Financial Health
Analyzing the state of your finances will give you some
clarity on how you manage your money every month, and help you in forming a
strategy for your financial planning. You will get some perspective on what
percentage of your net monthly income goes towards your liabilities. It will
also give you an understanding of your disposable income. Depending upon the
amount of ‘free money’ that you have after paying off the creditors, you should
plan a strategy to allocate money to the rainy day fund. Most financial experts
opine that you should ideally save 10% of your net monthly income every month.
Therefore, somebody earning $50,000 per year should be looking at saving around
$400 every month. This 10% is exclusive of the amount that you might be
funneling into stock market or buying gold bullion. It is important to remember
that there is a considerable difference between saving and investing your
money. We are not dissuading you from investing; in fact, it is the only way
you can grow your capital. However, you should consider investing only when you
have the required emergency funds to see you through an economic crisis.
Stick
to a Budget
When people are asked what stops them from saving for
emergencies, one of the common answers is, “I have so many debts to take care
of that I hardly have any money at the end of the month.” However, if financial
experts are to be believed, most people can easily save some money, provided
they stick to a budget. Most of us end up making impulsive decisions which
completely hamper our plans of saving for a rainy day. When we step out in a
shopping mall armed with a credit card, the likelihood of unnecessary
expenditure increases, which completely offsets the important task of keeping
money aside for a savings fund. Again, we want to point out that we are not
telling you to live a frugal life. Buying that new car or smartphone, eating
out at plush restaurants, taking a vacation – all these are important for every
one of us, but these should be done in moderation. Also, indulging in these
luxuries should only be done if you have at least six months of your living
expenses in savings. Trust me, once you have the security of a rainy day fund in
the back of your mind, you will be able to enjoy your life in a better way. Gold Price and Gold Bullion
See
if you can Moonlight
If you want to quickly accumulate funds for a rainy
day, try taking up an additional job. If you have sufficient time in your
hands, a second job might work very well for your financial future. There are a
lot of jobs that you can do from the comfort of your home. The internet has
opened up a huge market for crowd sourcing industry – an industry where people
are employed over the internet for ad hoc assignments. Writing jobs, website
designing, data-entry, etc. are some of the common jobs that are helping people
compliment their primary source of income. All you need is a personal computer
with an internet connection, and you can join the community of online workers.
Working hard today can mean that you are able to relax in the future, or
probably retire at an early age. So if it works for you, give a part-time job a
try.
No comments:
Post a Comment