A rainy day fund is important as it will serve as your back up plan if you lose your job or when unexpected expenses arise. Get started as soon as you can even if you only have a little to put in. What matters is that you are doing something now that will benefit you in the future!
1. Prevent Late Payment Fees
Late payment fees may not seem like much, but you will be surprised at how quickly they add up. Put the money supposedly for the payment of late fees into good use by putting it in your emergency fund instead.
2. Automate Your Savings
Stop making excuses for setting aside your savings by having automated deductions from your payroll account to your rainy day account. You can always control how much you put in, this is just a sure fire way that money is being added to your fund monthly.
3. Avoid Debt
Avoid spending money that you do not have to avoid debt. Although there are good and bad debts, it is still important to assess if you really need to borrow money or if you are thinking of unnecessary expenses. You will be able to save more money when you have less things to pay for.
4. Treat Your Monthly Savings like a Bill
Think of your savings as a bill that you cannot afford to miss paying, just like your rent, electricity,
or phone bill. Better yet, once you have finished paying for something costly, such as credit card debt, car payment, or student loan, shift that payment to your savings account instead.
5. Review Your Daily and Monthly Expenses
It is easy to overlook expenses such as your daily cup of coffee, weekly manicure, monthly TV/movie subscription .Going over your expenses will help you realize what is really worth spending on and what is not. This will help you cut off on your spending give your savings a boost.
Note: This is a guest post by CompareHero.my, dedicated to raising financial literacy in our country and to helping everyday Malaysians make smarter and well-informed financial decisions in life.