Saving Up For A "Rainy Season"

What is a "Rainy Season?"

I'm not talking about the Spring. 

A Rainy Season (in financial terms) is when you go through a financial struggle, whether it's through the loss of a job, totalling your car, your house burns down, or anything else that can really put you in a lot of unexpected debt. Rainy Seasons aren't predictable, and you should always prepare for them, no matter what salary or job you have currently. 

How do you prepare for a Rainy Season?

1. Calculate your monthly expenses.
• On a sheet of paper, write out approximately or exactly how much you spend each month on these things:
• Rent/Mortgage
• Utilities (gas, water, electricity, trash pickup, etc.)
• Cable/Internet
• House and Cell Phone bills
• Auto gas
• Auto maintenance
• Groceries 
• Dining out (including to-go coffee expenses)
• Entertainment (movie theatre, bar, golfing, pedicures, parties)
• Shopping (toiletries, necessities, tools/supplies, clothes, etc)
• Insurance (car, house, medical, dental, life, etc)
• Any others
2. After you calculate approximately how much you spend on each budget topic, add them all together and see how much you spend total per month on your living expenses.
3. Multiply this number by 6.
• The total should be how much you need to SAVE up into your Emergency Fund for AT LEAST 6 MONTHS.

Go to http://www.themoneysavinggarden.com for tips and advice for saving money on a tight budget.

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Problem #1: You think it will take a really long time to save up for 6 months worth of living expenses into your Emergency Fund.

• Solution #1:  For at least 6 months, BE FRUGAL! Only spend the bare minimum for what is absolutely necessary. The money you don't spend needs to be put straight into your Emergency Fund. No splurging for at least 6 months!
• Examples:
• Be extra conservative on utilities: turn off any light you are not currently using, turn A/C or Heat to a bearable temperature --not to where you are perfectly comfortable, only run water when you are using it -- not while waiting to finish brushing your teeth, etc.
• Entertainment is luxury: only see a movie once a month -- and see the dollar movies instead, drink at home instead of at a bar --much cheaper, do your own pedicure or get a family member to do it for you, limit playing golf to once a month, limit ball game tickets to once every couple months and get the cheapest seats.
• Eating cheaply: only buy groceries or eat out if you have a coupon to go with it, only eat out once every couple weeks, make your own coffee at home, bring a sack lunch to work, buy groceries in bulk that you use up a lot, don't overeat,  don't waste food --cook only what will get eaten quickly, order water at restaurants instead of getting a drink.
• Auto gas: don't "pedal to the metal" it, drive the speed limit --increase gas mileage and eliminate risk of speeding ticket cost, fill up all the way when you get gas --cheaper overall than filling up $20 at a time, fill up at cheap gas stations, leave earlier for work so you don't sit through as much stop-and-go traffic that decreases gas mileage, CARPOOL if possible!
• Cancel any unnecessary bills or payments: do you have to have cable? watch movies instead or watch regular TV, go to a friends house to watch your favorite cable show if they have it, watch old movies you already have at home. Do you have to have internet? Most people have smartphones these days, anyway and don't need to have internet on their computers at home when they can just look it up on their phone.

Problem #2: You can't predict how long you will be able to work at your company or if you are going to be let go anytime soon. 

• Solution #2: Work extra hard! You should be working hard, anyway, but strive to be the best for the next several months. Heck, you might even get a promotion or raise out of it! 
• Examples:
• Be initiative and pro-active (don't wait for people to tell you what to do)
• Offer new or innovative ideas (potential clients, marketing opportunities, problem solving, efficiency and time management, etc)
• Be helpful. If you are done with your work, ask around to see if there is anything you can do to help others
• Bring donuts or coffee to your office (unless you share an office with a lot of people)
• Double check your work before turning it in

Go to http://www.themoneysavinggarden.com for tips and advice for saving money on a tight budget.