
A financial back-up plan is essential. It’s the umbrella you need to help protect yourself from life’s surprise expenses and stress.
Some experts recommend stashing six months’ worth of living expenses in an emergency fund. However, not everyone can manage that level of savings.
Saving for rainy days can help you avoid expensive solutions like payday loans or raiding retirement funds. Here are 10 smart ways to save for your next financial storm:
1. Set up a budget
While saving for a rainy day is a great goal, it’s important to make sure you are saving in other ways too. Start by evaluating your monthly expenses and determining which areas you can cut back to create room for savings.
Then, set up a separate budget for your rainy day funds and track your progress each month. You can use a budgeting app, or simply create a savings jar. Even adding a few dollars a week to your rainy day fund can add up quickly!
Having a rainy day fund can reduce stress and prevent you from resorting to high-interest credit solutions that could set back your long term financial goals. Having this cushion can also help you avoid using payday loans, which carry expensive fees and can lead to debt. Aim to have this fund cover a few months of typical expenses in the event that your income changes.
2. Set up a savings account
Although a rainy day fund is smaller than an emergency fund, both are crucial components to your financial safety net. Your goal should be to have enough money saved up to cover a few months worth of expenses.
Consider putting any tax rebates, work bonuses or any yearly cash you receive straight into your savings accounts, rather than spending it or using it to pay for other expenses. This will help you build your funds even faster.
To gauge how much you need to save, think long-term about some of your bigger what-if expenses, such as your car breaking down or an unexpected medical bill. Then, work backward from there to figure out how much you should be saving each month.
3. Set up a direct deposit
You can save money for rainy days by setting up a separate direct deposit or downloading an app that automatically diverts a percentage of your paycheck to a savings account. You can also create a savings jar or piggy bank for your spare change.
The key is to get into the habit of saving as soon as you get paid, before your other expenses. This is known as paying yourself first and it’s a great way to build your rainy day fund.
Once you’ve established a savings goal for your rainy day and emergency funds, you can start setting up automatic transfers to these accounts. It’s important to choose an account that offers competitive interest rates, is FDIC insured and allows for fee-free withdrawals. A savings account is a good option because it’s easy to access, even when you need it the most.
4. Make a list of expenses
One of the best ways to save for rainy days is by setting up a budget. To do this, you should make a list of your expenses and income to see how much you are spending each month.
For business owners, it is also important to identify your fixed expenses (rent, insurance, technology licensing), as well as variable expenses that can change from month to month (marketing, staff wages). A rainy day fund helps you weather unexpected financial storms and reduces the need to use credit cards.
Another great way to save is by downloading a free app like Ibotta, which offers real cash back on groceries, pharmacy purchases, movie tickets and more. As you build up your savings, be sure to reward yourself each time you hit a milestone! This will keep you motivated.
5. Take advantage of rewards programs
A rainy day fund allows you to cover unexpected expenses like a broken appliance or an unplanned trip. It gives you peace of mind knowing that you can afford the expense without charging it to a credit card or taking out a personal loan, which typically come with high interest rates.
Getting into the habit of consistently saving can make all the difference in building your rainy day fund. When you get a raise or land a new job, consider reworking your budget to allocate more of your income to savings. Maximizing savings with coupons is one of the best options for you so that you can save more!
6. Set up a savings jar

Saving for a rainy day or emergency fund can be an overwhelming task. Luckily, there are many ways to make it easier and more fun.
Try setting up a separate savings account or a piggy bank. You can also use a budgeting app to automatically deposit money into your retirement, emergency and rainy day funds.
If you have a high-yield savings account, you can even earn modest returns on your cash. It’s important to keep your rainy day and emergency funds accessible, so choose an account that allows fee-free withdrawals.
7. Take up a side gig
A rainy day fund is a good idea. It’s the financial buffer that helps prevent financial needs from becoming crises, which can be stressful and debilitating.
Saving for a rainy day fund doesn’t have to be difficult, but it does take a little time and dedication. By setting a goal, automating your savings, cutting back on expenses and considering a side gig, you can start building a safety net for unexpected expenses.
Woodworkers can make birdhouses, lawn decorations and indoor furniture; freelance writers can compose poetry, product descriptions and research papers; and people with a passion for collecting can turn their collections into cash. Another smart strategy is to separate your emergency and rainy day funds into their own accounts to avoid the temptation of spending it on regular expenses. By utilizing these strategies, you can build your rainy day fund and reduce your stress.
8. Try a no-spend month
A rainy day fund can help you avoid costly solutions like taking out a loan or raiding retirement funds. It also gives you peace of mind knowing that you’re prepared for the unexpected.
Some experts recommend keeping an emergency fund of three to six months of expenses in case something comes up that you weren’t expecting. Others, like financial guru Suze Orman, believe you should have even more than that saved.
It’s important to keep these funds separate from each other. Otherwise, you could accidentally dip into one of them and reduce the amount in the other fund. To keep yourself motivated, try rewarding yourself each time you hit a savings milestone. This will make the whole process more fun and make it easier to stick with your savings plan. For example, you might treat yourself to dinner or a movie after reaching your goal.
9. Set up a savings account with a high interest rate
The best way to prepare for financial rainy days is to set aside money regularly. Tracking your spending and minimising unnecessary expenses can help you see how much you can save each month.
Conventional wisdom states that a rainy day fund should hold three to six months of your family’s living expenses, plus all insurance deductibles. But sequestering thousands of dollars in a savings account that earns 0.01% isn’t the best use of your cash.
Instead, consider finding a savings account that pays higher interest rates. Online tools allow you to select the perfect home for your savings based on your preferences. You can even find easy access products that let you move money in and out whenever you want – perfect for your rainy day fund. This can also reduce the stress you feel when life’s little surprises pop up.
10. Create a budgeting app
You may not be able to predict when bad luck will strike, but it’s always best to be prepared. Having a rainy day savings pot is one way to do just that.
Unlike an emergency fund that kicks in after job loss or a major health crisis, a rainy day budget is meant to cover smaller surprise expenses like a broken pipe or an engine light that goes on in your car.
A budgeting app can help you save for unexpected financial bumps in the road. Or, you could try something more old-fashioned like creating a savings jar or piggy bank. Tracking your spending regularly can also give you a more accurate picture of where you’re wasting money and how to make improvements. It can also help you identify any unnecessary purchases that are eating into your rainy day funds.