Establishing A Rainy Day Fund Is Key Towards Gaining Financial Freedom
Advice to Establish a Rainy Day Fund to Avoid Needing Payday Loans or Emergency Cash
There have probably been times when you were really short on cash and found yourself in need of a payday loan in order to pay your bills or take care of other responsibilities. However, taking out payday loans can be very costly, and it can get you in an even worse financial situation than you are in right now. Therefore, it is a far better idea to have a “rainy day fund” in place so that you don’t have to deal with payday lenders next time you find yourself in a tight financial situation.
Although it might seem hard to establish one of these funds if money is already really tight, starting out small can help. To begin, start setting aside a bit of money from each of your paychecks to put in savings. Although it is nice to set aside as much as you possibly can, it isn’t always feasible to save tons of money from each paycheck. Even something small, like 20 dollars or so each week, can add up to be a nice rainy day fund over time. You can even try stashing your spare change and one dollar bills to the side as a part of your rainy day fund; you might be surprised by how much money it can add up to in a couple of months.
Once you have started setting aside money, you will need a place to put it. Many people keep their rainy day money in a change jar or somewhere in their homes, or you might think that you should keep it in your checking account in order to pad the amount of money that you have. Although any form of saving is better than none, there are definitely better options out there. For instance, you should try opening up a savings account that will accumulate interest for you. Then, your rainy day fund can grow even when you don’t put any money into it.
The most important thing to remember when it comes to establishing your rainy day fund is not to touch it unless you absolutely have to. It might seem easy to sneak a 20 dollar bill out with the intention of replacing it on payday, but this can be a hard habit to break and can cause you to drain your rainy day fund unnecessarily. It’s a far better idea to pretend that you don’t have any money at all; then, you won’t touch your fund unless you find yourself in a tight situation financially and really need it. This can be a far better alternative to taking out payday loans, and you are sure to feel good about yourself and your financial situation when you know that you have money set to the side for when you need it the most and when you can finally say goodbye to all of those payday lenders once and for all.
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