7 Tips for Creating Your Own Rainy Day Fund

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Mike Foguth PhotoBy Michael Foguth

Automate your Savings

It is a good habit to start saving from your income checks on a regular basis. The best way for this to occur is to set up an automated savings account where every single pay check you can save a certain dollar amount and put it into a separate account labeled your “rainy day fund.” This can be as simple as saving $20 per check.

Progressive Saving: The 52 week challenge

The 52 week challenge consists of starting with $1 the first week and depositing it into the savings account. The second week would consists of you depositing $2 and so on, every week you would add an additional $1. By doing this every week for 52 weeks, at the end of the year you will have saved $1378.

Declutter your life

Selling items you no longer use will not only increase your rainy day account but it will declutter your house and by doing this it will allow you to become more organized as well while putting extra money into your pocket.

Buy a new “piggy” bank

In order to help you get in the habit of saving extra money for your “rainy-day” account, buy a new piggy bank or jar of your choice. The psychology behind this idea is that every time you walk by this object you will be notified to empty your pockets and put your extra change into the jar. Don’t be afraid to put dollar bills in your saving jar as well. After all, money is money and the faster you can grow your savings account the better!

“Round-Up” your spending

With new technology in place, it is becoming a lot more convenient to “round-up” your spending’s. If you are using a charge card you can simply ask your bank if they have this option available, if not you can download acorns which is a great app that allows you to do this. The idea behind rounding up your spending is to take the left over change and deposit it into a savings account. It will amaze you how fast a little bit of change can add up.

Do something that you love to create a “part-time” income

The idea behind this step is to find something that you love and instead of using the compensation as income, you can save all of your checks and place them into a savings account.

Reduce any reoccurring monthly expenses

The best way to save a few extra dollars from your already planned monthly expense budget is to try and reduce bills. The best and most efficient way to do this is to simply call your carrier whether it be cable, phone etc. and ask if they have any specials going on that could be applied to your account. Don’t fluctuate your budget, instead keep it the same and anything that is left over can be placed into your savings.

Michael Foguth, Founder of Foguth Financial Group, specializes in working with retirees and those nearing retirement who desire to protect their hard earned money and ensure that it is there when they need it. Foguth is an educator for the Richness of Life Institute through Cleary College & Central Michigan University and has recently teamed up with Steve Forbes of Forbes Magazine along with other industry experts to co-write Successonomics, an Amazon.com best seller. For more information please visit foguthfinancial.com or call 517-618-7207.

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