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  • Kiena Lee

How Much Should You Have in a Rainy Day Fund?

In this article series, I share excerpts from my book, Divine Secrets of Affluent Women: The Guide To Owning Your Wealth. I hope you enjoy this post — if you like to connect, you can reach me via email or connect with me on social: Instagram, Twitter, Facebook. Also, you can also find my book on Amazon — here is the link to purchase the Kindle version.




Do you have savings?


Saving money can be a challenge when you don’t have a plan.


But here’s the thing: saving money is possible if you start off small.

For example, start by saving one penny on January 1st, two pennies on January 2nd, three pennies on January 3rd, and so on. If you continue this pattern and by the end of the year, you’ll be setting aside $3.65 on December 31st, aka almost $668!


Perfect for a rainy day, right?


The next time you think that saving money seems way too hard, think about how much you can possibly save if you start small.


Mindful Savings is two fold.


Mindful Savings is Saving for what you can control [retirement & college education] and savings for what you can’t control [health care and taking care of aging family member]


Your first savings challenge is to establish a rainy-day savings Fund [if you don’t have one yet]. A rainy-day savings is money set aside exclusively to cover the cost of unexpected events such as a job loss or major car troubles. This is your peace-of-mind money when times are good and you can defend against financial ruin if things turn bad. This fund serves as a personal safety net with a hidden advantage — you get in the habit of putting away money.


How much should you have in the rainy-day fund?


1. Calculate how much you need to feel comfortable. Three months of expenses is a good starting point. For those of you who love numbers, you can figure out how much you should save by adding your mortgage or rent payments, the kids’ expenses, food costs, car payments, utility bills, and any other fixed and incidental expenses. Take a look at your expenses for the past few months and focus on basic needs. Keep in mind that you can cut back on dining out or buying new clothes but don’t skip the electric bills.


2. Figure out how much you can save each month. This requires checking your money mind-map. How much is left over after paying all of the expenses?


3. Challenge yourself to cut expenses and increase your savings. Are there expenses you can cut back, like the premium channels on your cable television bill or the weekly eating out? Can you work overtime to boost your savings?


Once you decide how much money you can put aside, set up a monthly direct deposit, or create an automatic transfer from your checking account into your savings account. Scheduled deposits will ensure successful savings, and the size of deposits should be determined by what you can afford.


Keep in mind that it takes time and discipline to build an emergency fund. Fight any urge to tap the fund for predictable expenses like car insurance or property tax.

So go ahead, figure out your expenses and how much money you can put aside each month! Trust me, that information is already on your money mind-map. Just take a quick peek. Your goal is to have six months’ worth of expenses saved up, I know it sounds impossible, but I promise you it is doable and life-changing. Before long, you will be a disciplined saver.


For more information, you can find my book on Amazon — here is the link to purchase the Kindle version.

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