Do you have enough money set aside should some major happen like losing your job, or even a everyday thing like needing a new set of tires for your car?
My maternal grandmother (one of my money mentors), always had a rainy day fund and she taught me the importance of having one too.
I’ve always set money aside for the just in case scenarios that always seem to happen when you least expect it.
Take for example something that happened this week. Sunday lunch time I was eating leftover pizza and bit down and knew something wasn’t quite right. I realized I’d lost part of the filling in one of my wisdom teeth. Long story short, the pizza incident translated into me spending most of yesterday morning in the dentist’s office having a crown put on the tooth. I’m lucky that dental insurance will cover most of the cost. However, what if it was for something not covered by insurance? What if this happened and you were living paycheck to paycheck and had to pay the bill with a credit card? Even knowing it was going to take you a long time to pay it back. Knowing you’ll be handing over even more money than the cost of the original bill? It’s often how credit card debt starts and snowballs.
About ten years ago, I set up a rainy day fund. I opened an online savings account and have my royalties from one of the publishing platforms directly deposited into it. Besides checking on the balance each month, I don’t think about it too much because out of sight, out of mind, and there’s less of a temptation to spend it.
If you haven’t started your emergency fund, I encourage you to set something up and deposit money into it, even if it’s just $5 or $10 every month, until you have what you consider a comfortable amount. Or as I call it, the safety net that can pay some bills and prevent you from needing to reach for the credit card. Even start a side gig and use the money to fund the rainy day account.
When the next bump in the road happens, I think you’ll be glad you did.