It’s springtime and you know what that means — a forecast full of rainy days. As you curl up with a good book, or binge your favorite shows, while you wait for the springtime showers to pass, take some time to prepare for a different kind of rain: unexpected expenses. Whether your car gets towed, your dog gets sick, or your bathroom floods, it’s important to be prepared for these unforeseen events.

rainy day fund

As the old saying goes, when it rains, it pours, and for most everyone, costly situations happen at inopportune times. What matters most is how well prepared you are to handle them. Having a rainy day fund in your pocket will keep you from having to take out a loan or dig deep into your emergency fund. Don’t have a rainy day fund and not sure where to start? That’s okay! Follow these steps to get started on saving for those unexpected expenses:

1. Know the difference between a rainy day vs. emergency fund. First and foremost, it’s important to understand the distinction between a rainy day and an emergency fund. An emergency fund, which should be around 3-6 months’ worth of living expenses, is meant to serve as a safety net for more serious financial situations, such as job loss or a major illness. A rainy day fund is intended to pay for a one-time, smaller expenditure, dedicated toward paying less severe, but still significant costs — anything ranging from a $300 credit card charge to a $1,000 car repair. Rainy day funds keep your regular budget from getting knocked out of whack and protect you from falling into debt.

2. Assess your personal needs. How much money should you put into your rainy day fund? It all depends on your personal financial situation. A good rule of thumb is to have at least $1,000 worth of rainy day savings, and adjust upwards, according to your needs. If you work as a freelancer or drive an older car, you might consider putting aside more in your fund than someone who has a regular nine-to-five and takes the train to work. Take into consideration your total debt, income, your financial goals, and others you are currently supporting financially. You can even use a tool like Turbo, which combines all these factors in one place, to give you a better picture of your true financial standing.

3. Continuously and consistently save. Unlike a vacation or a new car fund, a rainy day fund should be replenished — just because you made it through one costly circumstance doesn’t mean another one won’t pop up. To ensure you’ll always have something put away, consider automating your savings. If you have direct deposit, allocate part of your earnings to be automatically transferred to a savings account. If you need to be a little more strict with yourself, consider opening a savings account that isn’t linked to your checking account, so you won’t be tempted to just transfer your savings right back to your checking account. Another simple way to build up your rainy day fund is to go old-school and collect any spare change or cash in a jar; every little contribution counts! You can start off small, and adjust how much you contribute and where you place your funds as your other financial obligations ease up, or as you progress in your career. The bottom line is that there isn’t a minimum requirement for saving. Contributing a small amount at first will set you up for success in the long run.

4. Rein in on spending. To integrate a rainy day fund into your budget, you’ll probably have to cut down on unnecessary spending. While a new dress or happy hour with friends may make you feel good in the moment, if it detracts from your savings plan, it won’t feel good long term. It’s important to keep your eye on the big picture; you never know what can happen, and taking the risk of not having a rainy day fund isn’t worth it! Reining in spending doesn’t mean you can’t do the things you love; you just need to take some time to organize your spending and figure out your priorities. Rank your regular expenses based on which ones are most essential and fulfilling and align closest with what you value: If that $50 a month dance class is important to your mental and physical health, then you might keep that in your spending but cut out happy hour with coworkers. Have you just gotten a hefty tax refund or work bonus? Treat yourself to something small and funnel the bulk of your new funds into your rainy day savings. Are you an online-shopping addict? Delete your credit card info from your most frequented online shopping websites. You can also use a budgeting app like Mint, which helps you categorize and track your spending. Your future self will thank you the next time you decide to walk past your local coffee shop without stopping in for your daily latte, or when you decide to stay in one night, instead of going out to that trendy bar.

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