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Rainy Day Fund

A rainy day fund is a separate savings account that is smaller than your emergency fund.

While your emergency fund is meant to cover all your necessary expenses such as mortgage/rent, car payments, utilities, etc., in case of, you guessed it, an emergency, your rainy-day fund is meant to cover unexpected expenses like a ticket, car repairs, appliance replacement, or any other large ticket item that could drastically impact your budgeting.

But how much should be in your rainy-day fund, where do you keep it, and how do you budget for it? Depending on your income level, the average rainy-day fund should hold between $500 and $2,000 dollars.

That seems like a large estimate. And it is. To figure out how much you specifically need, evaluate the items in your life that the fund would be used for. Do you have a higher end car that costs more to repair? Or do you have a mid-grade car that doesn’t need custom-ordered parts and a specialist to fix? Same with your appliances, how much would it cost to repair your dishwasher, or worst-case scenario, replace it?

Other things to consider are: do you rent or own? What is your deductible on your car? On your medical insurance?

Once you figure out the appropriate amount to have in your rainy-day fund, now you need to budget for it and have a secure location to house it. Ideally, you want your money to work for you any time it’s just sitting there, which is why it would be prudent to house your rainy-day fund in a high-yield savings account.

Once you have a set location, you can figure out how much you can afford to funnel into your fund. One of the most successful ways I have seen it done is to take a manageable amount, something you would easily spend on a lunch date or as an impulse buy, say $20, and move it over to your account each week.

If you can afford more, great! If not, don’t worry, it’s best to just get started!

If you need help figuring out budgeting and how to cover emergency expenses, don’t hesitate to reachout. We would love to help.

Phone: (503) 257-0057


Source: Bill Good Marketing, Accessed 3/22/23



DISCLOSURE: Investment advisory services are offered through Gretchen Stangier, Inc. DBA Stangier Wealth Management (“Stangier Wealth Management”), an investment advisor registered with the U.S. Securities and Exchange Commission. Stangier Wealth Management only offers investment advisory services where it is appropriately registered or exempt from registration and only after clients have entered into an investment advisory agreement confirming the terms of engagement and have been provided copies of the firm’s ADV Part 2A brochure and Part 3 documents.

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