Published On: Fri, Mar 29th, 2019

What Are The Most Effective Ways To Build A Rainy Day Fund This Year?

A 2019 survey shows that many individuals are still not saving as they should for retirement or emergency expenses. Among 1,000 working adults in the United States alone, approximately 21 percent said that they do not save any of their income at all. Whether you dream of retiring early or simply having enough to cover emergency expenses, an active plan to save a portion of your income must be a priority.

Thankfully, there are many effective ways to easily create a nest egg to achieve your financial goals. From accessing expert advice in minutes, to automating every part of your banking and savings, it has never been easier to manage your finances. Discover three top strategies for building your rainy day fund this year.

Effective Ways To Build A Rainy Day Fund

Make smart investments

When building wealth or a savings, having a mix of investments is crucial. Currently, just 54 percent of Americans have invested in the stock market. However, studies have continued to show that nearly all individuals who are in the top 10 percent of income bracket have investments. Rather than trading time for every dollar you earn, you can create a savings much more quickly when earning passive income. As you begin to learn more about investing, it is essential to make wise choices, and to find an expert that you trust. Also, be sure to mix tangible investments with intangible ones. For example, the future of silver is stable because of its unique properties. Not only is it real, physical money, but the demand for silver is growing, and it historically has performed better than gold during bull markets.

Automate your savings

As of 2018, 1 in 3 American adults reported having retirement savings of less than $5,000. Why does it seem so challenging to save for retirement and daily emergencies? Research from Cornell University shows that the brain is more likely to cause people to focus on making money instead of saving it. In other words, most individuals subconsciously do not prioritize building their savings. If you are someone who finds it difficult to actively put away money, technology has created a solution for this problem. Banks and savings apps now allow you to automate how much you save. One option is to round up each purchase you make to the next dollar, and have each of those transactions sent to a savings account. Alternatively, you can set a specific amount to be automatically saved each day, week or month.

Use top-rated apps to learn more about how you spend your money

One of the most crucial steps in being able to save as much as possible is knowing how much income you actually have to work with. Experts recommend that if possible, you should be striving to save about 20 percent of your income. If you are uncertain about how much is left over after paying the bills, download a trusted, top-rated financial app to help you track your spending. Apps such as Mint and Quicken allow you to track how much you spend, and where you are spending that money each month. Upon seeing an accurate picture of your disposable income, you can make adjustments to save even more.

No matter where you are in the process of reaching your financial goals, having savings is an absolute necessity. By leveraging the strategies above, you can quickly begin to build a sizeable rainy day fund.