How much should I have saved for a rainy day?

Many of us are feeling the pinch lately with the cost of everyday items rising and the highest inflation Australia has seen in 20 years.

But even when finances are tight, it’s still a good idea to put money aside in case something urgent or unexpected comes up.  

You might have to pay for emergency home repairs or replace a broken white good, or you might want to take time off work to care for a loved one. Taking practical steps to save for a rainy day means you’re prepared.

Saving makes sense.

Having savings in the bank means that when the unexpected happens, you won’t have to borrow from friends or family or take out a loan. Getting into the habit of saving money can also help you achieve your financial goals. 

How much do I need?

It’s up to you how much you need for your rainy- day savings, but a general rule of thumb is to have enough to cover three months of expenses. While this might seem like a daunting target to reach at first, if you start small, make regular payments, and think about automating contributions, your rainy- day savings will grow. 

5 tips to get your saving started and keep it going.

Set a savings goal.

Use an online budget planner to work out your monthly expenses including items like how much you spend on groceries, the cost of your utilities and medical expenses. Multiply the amount by the number of months you want your savings to cover.  

Open a separate savings bank account.

Savings bank accounts will often have a higher rate of interest which means your savings will grow more quickly. Some savings accounts also reward you when you don’t dip into the funds and they often don’t have a debit card, which makes it easier to save.

Have a schedule for reaching your savings goal.

Use a savings calculator to find out when you’re going to reach your target. You can test different deposit amounts to see how it affects the time it will take to reach your savings goal.

Tell someone.

By letting a friend or family member in on your savings goal, you’re more likely to stick to your plan. They can also encourage you to keep on track.

Make spending rules.

Put rules in place about the types of things you can spend your rainy-day funds on. Keep savings to pay only expenses that need to be paid urgently when you don’t have other money available. If the expense isn’t urgent, save for a few weeks and then pay the bill.

And when you do dip into your savings, try to top up your savings account afterwards.

Struggling to meet your savings goals?

The Beyond Bank+ App is here to help.

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