Saving for a rainy day seems obvious enough, but it is surprising how many people don’t do it.
It is irrelevant what wage you earn, in fact frugal people are often better at it than those people where money flows in and has never been too much of a concern to them.
Australia has and is seeing some tough times, the length it lasts will depend on many factors, most of which will be outside of your control.
What is inside your control is how your prepare for it. There are job losses, rental markets going up, markets will be affected but that’s life- this is not a doom and gloom post!
But reality is important and you must be aware of factors not just in your own backyard, as we are all affected in some way.
The usual stories of whether or not they will change the laws on negative gearing continue, they may or may not do it but it is important to ask the question – how would that affect me?
Saving for a rainy day.
So many people spend their whole paycheck/wage and are count down for the next. In some of these cases they are paid extremely well – it comes down to education. If you have never been shown how to save if you never been told/shown how important it is to put something away for a rainy day – Educate yourself.
It is also important to understand your weaknesses. If you do not have willpower – then don’t open the bank account for your saving for a rainy day with the same financial institution as your normal everyday banking. Ensure you set up a progress saver with bonus interest.
If you know you are not going to remember to transfer money in there set up a direct debit for the day after you paid that “x” amount automatically transfers out. After a month you will not even notice the amount disappearing.
When the buffer/rainy day account gets to a certain figure and that figure is different for everyone you could look at investment options that could attract a better return on your money. Shares, term deposits, Property etc.
Your portfolio is growing and you are protected in the event of a rainy day! There is no time like today to start!
Cake and Eat it 3