Why We All Need To Save For That Rainy Day In Australia

published on: September 15, 2023 last updated on: June 20, 2024
Save For That Rainy Day

If you are not familiar with “Save For That Rainy Day”, then you should know that it is money that you put away for expected and unexpected expenses. We are told from a very young age that a rainy day will come along for all of us, and so it’s best to be prepared.

This is why we are encouraged to start saving money when we are young, and it is a habit that we carry with us into our older years. In this comprehensive guide, we will take a toll on negative spending habits and why everyone should have a rainy day budget.

Reasons To Save For That Rainy Day In Economic Terms

We have a very bad habit of impulse buying here in Australia, and we end up spending our hard-earned cash on things that we don’t even need or want. The Internet and online shopping have made it incredibly easy to buy things, and along with our debit and credit cards, many of us are out of control.

This is why you need a rainy day fund in the form of term deposits because this is money that is put away for an agreed amount of time, like three years, for example, and you get a guaranteed rate of interest over that time.

Lowers Financial Stress

Economic stress can create havoc on one’s physical and mental health. Moreover, it can impose negative effects on your relationships and work. But with a financial buffer, you can have peace of mind- knowing that you do not have anything to worry about. 

Gives You Back The Control

At some point in time, we might feel that life is getting a little out of control. In such times, guess what can bring things back to normal? A smart investment. Owning a financial cushion not only offers you a sense of empowerment but also makes you prepared for unprecedented situations. 

No Possibilities Of Debt

People not having a rainy day fund might end up turning to greater debts like personal loans and credit cards. They try to break their FDs or lifetime savings in order to cover unexpected costs. Hence, a well-stocked fund lets you handle economic challenges without any additional debt incurred. 

What Is The Ideal Saving For A Rainy Day Fund? 

Talk to any financial expert, and they will suggest you save $500-$2,500 for such a fund. However, the amount of saved money depends entirely on your personal needs and circumstances. Make a list of your household expenses. If your water furnace or heaters have got old, price out an emergency repair and keep that amount as a goal. 

It is crucial to assess your personal economic situation and identify the accurate amount of savings for yourself. Make sure not to jumble up in the numbers. It is always better to save for that rainy day than to have nothing at all. 

All you can do is start with a realistic goal. Keep aside a dedicated amount each month until that particular number is reached. Make sure to dedicate an automatic transfer so that you can have regular contributions. After hitting the goal, it will be easier to determine if it’s sufficient or whether you still need to invest in your fund. 

What Saving Strategies You Need To Follow?

You won’t be tempted to take the money out to spend on something you don’t need because it is locked in, but it is always available to you should you need it for a real emergency. There are a number of strategies that you can follow to build up your rainy-day savings, and the following are just some of those.

Make a comprehensive list –

It makes sense to write everything down in put it into your computer so that you have a good idea of the expenses that are coming up. There are many things that you could put on there, like the ongoing maintenance for your car, essential repairs to your property, and things that your kids need, like braces for their teeth, and maybe there is a school trip coming up. This gives you a goal to head towards and provides you with the impetus to save.

Find the right term deposit account –

There are a number of different banks out there and building societies that want you to save with them, so you need to start doing your homework as to the interest rates that they offer and if they charge fees or not. By opening up such an account, you will have access to your cash if you really do need, but if you can leave it, then it will grow in value.

Try to make it a habit –

You always want to be putting money into your account, so it might make sense to set up something like a direct debit that takes money out of your salary every single month and deposits it for you. It’s likely that you’re very busy from day to day and you might forget to make the deposit by yourself.

Plan A Proper Budget – 

Now that you are well aware of your economic outgoings and incomings, it’s time to make a budget. Seek help from various online templates and resources that can provide assistance. For a rainy day fund, it might be crucial to ensure enough funds for uninterrupted payments. 

And not only is it important to plan a budget but also to stick to it diligently. That’s the key to economic success. 

Summing It Up…

It is always good to get into the saving habit because there will always be money for you when you need it in an emergency, and this is peace of mind that every one of us would like to have.

While selecting a savings account for your fund, opt for a high-yield savings account. No human being is perfect, and as a result, it is important to have a backup financial plan. 

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Ankita Tripathy

Ankita Tripathy loves to write about food and the Hallyu Wave in particular. During her free time, she enjoys looking at the sky or reading books while sipping a cup of hot coffee. Her favourite niches are food, music, lifestyle, travel, and Korean Pop music and drama.

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