A little for later
It’s a common conundrum, “do I spend this money now or put it into savings to use in the future?”
Many experts believe that having specific goals can help boost motivation to save.
The ING International Survey on Savings 2014 found that an emergency fund was the most commonly cited savings goal among the almost 13,000 respondents. An emergency fund – sometimes called “rainy day” money, as it is used when conditions take a turn for the worst – is one of the basics of healthy personal finances.
Going with the flow (chart)
Our fun flow chart on rainy day savings details questions you can ask to determine if you have enough set aside for when a financial emergency strikes.
It tells how even those who do have some savings should double-check whether they have enough.
A rule of thumb is to build up three-to-six-months of earnings – at the higher end of the scale if you have a lot of financial commitments and few insurances offering cover.
How to build an emergency fund
Our slideshow How to build an emergency fund give eight steps on saving a financial buffer for a rainy day. It highlights the importance of carrying out budgeting basics, suggests building routine (such as “paying yourself first” on payday) and not forgetting to top up the fund again if it has been dipped into.