Unexpected expenses, market fluctuations, or a sudden job loss could leave you financially vulnerable. This is what I call rainy day. If you are wondering what this means, I will try to explain it below. A rainy day is a time of need or trouble. The truth is that most people are never ready for this day. This article will give you some tips on how to prepare for a rainy day. You will find below some useful tips to help you get ready for your bank account’s rainy days.
It’s never a bad idea to prepare for a financial emergency.
Know the difference between a rainy day fund and an emergency fund … but have both!
People often use these terms interchangeably, but there are some big differences between a rainy day fund and an emergency fund. A rainy day fund is typically designed to cover a relatively small unexpected cost, like a car repair or minor medical bills. Emergency funds are supposed to help cover expenses that might accumulate during a long period of unemployment or if you experience serious health complications. Both funds are important for preparing for your financial future. So, it is never too early to start building both accounts.
Tackle Your Debt Now
Just because you can manage your debt now doesn’t mean you’ll be able to do so in the future. Prioritizing debt reduction, especially if you have student loans or credit card debit, can go a long way toward helping you prepare for an unexpected financial emergency. It never hurts to come up with a budget that includes paying down debt and to set a date for when you want to be debt-free. If you don’t know where to start, start by paying yourself first. You can then use the fund to pay off your debt.
Learn Relevant Skills To Bolster Your Employability
One of the worst things that can blindside you is unemployment. That’s why taking steps now to help with a potential future job search can be so important. Search for free online educational resources and classes, and also explore certifications. Those can go a long way towards diversifying your skill set (and can look great on a resume). No matter how busy you are, you can create time to learn a new skill today.
Finally, none of these “how to prepare for a rainy day” tips will do you much good unless you set the ball rolling today. The best time to prepare for an emergency is before the shock and stress set in! Take the first step today.
If you are looking for tips on how to set up a budget, visit my WFG Connect page.
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Featured Post image credit: aarp