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How to Save for a Rainy Day Fund

It’s a good idea to be prepared in the event of an unexpected financial crisis or illness. Experts recommend that you have at least three to six months of your salary saved for an emergency.

Learn how to save for a rainy day fund with the following suggestions.

How Much Should I Save for a Rainy Day Fund?

learn how to save for rainy day fund

The average personal saving rate in the United States is 3.6%, but many experts recommend the 50/30/20 rule for saving money.

This rule suggests that 50% of your income go toward necessary, day-to-day expenses, like food and transportation; 30% go toward lifestyle choices, such as entertainment and hobbies; and the remaining 20% go into your savings.

Ways to Save for a Rainy Day Fund

In addition to using the 50/30/20 rule to save for a rainy day, these tips can help your put away money for those inevitable rainy days.

Open a Savings Account

A study found that 62% of Americans have less than $1,000 in their savings account. while 20.7% don’t have a savings account at all. Don’t follow the crowd—take control of your finances and start saving for emergencies by having a savings account.

A great option is a high yield savings account that is FDIC-insured with no minimum balance and offers quick access if an emergency occurs.

plan for your future

Set Aside Extra Money

In 2015, the average tax refund was $3,120. Instead of using that money on a big purchase, add it to your savings. Do the same with work bonuses or overtime pay.

Cut back on your day-to-day expenses and set aside this extra money for a rainy-day fund. Since spare change can add up, keep a jar for loose coins and deposit it into your savings account once it’s full.

Consider a Money Market or Certificate of Deposit

A money market account (MMA) or certificate of deposit (CD) allow you to earn interest over time.* Additionally, both types of accounts are FDIC-insured. These are great options for letting your money grow over time.

Save for Your Rainy Day Fund with Synchrony Bank

Synchrony Bank offers savings accounts that are FDIC-insured up to $250,000, per depositor for each ownership category. Call 844-345-5789 or open an account today to get started saving for your rainy day fund today. 

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Sources: 

Forbes: https://www.forbes.com/sites/learnvest/2016/04/15/heres-how-much-money-you-should-really-save-for-your-emergency-fund/#6c3dc1e046b1

Forbes: https://www.forbes.com/sites/trulia/2016/07/11/new-to-budgeting-why-you-should-try-the-50-20-30-rule/

GoBankingRates.com: https://www.gobankingrates.com/banking/62-percent-americans-under-1000-savings-survey-finds/

Social Security Administration: https://www.ssa.gov/planners/lifeexpectancy.html

Investopedia: http://www.investopedia.com/terms/m/moneymarketaccount.asp

Investopedia: http://www.investopedia.com/terms/c/certificateofdeposit.asp

*National Average APYs are based on specific product types of top 50 U.S. banks (ranked by total deposits) provided by Informa Research Services, Inc. CD Rates: Average APYs are based on certificate of deposit accounts of $25,000. High Yield Savings Rates: Average APYs are based on High Yield Savings Accounts of $10,000. Money Market Account Rates: Average APYs are based on Money Market Accounts of $10,000. Although the information provided by Informa Research Services, Inc. has been obtained from the various institutions, accuracy cannot be guaranteed.


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