Saving for a Rainy Day

saving for a RAINY DAY You can budget for everyday expenses, but what happens when life throws you an unexpected expense? Auto repair, major appliance, sick dog? A rainy day fund can cushion the blow. What are RAINY DAY .-- Funds? Readily-available cash accounts to cover one-time events without damaging your monthly budget TYPICAL UNEXPECTED COSTS auto Average auto repair on 1996-2012 vehicles: health care Average out-of-pocket healthcare expenses: 2009 $2,500 2006 $422.36 2013 $392.49 2014 $3,301 est appliances Average cost of a major appliance in the U.S.: REFRIGERATOR $900-$8,000 DISHWASHER $400-$700 RANGE/OVEN $650-$2,000 WASHER $350-$1,000 DRYER $400-$1,000 pets $2,700 $375 Average veterinary expenditure per household in 2011 Average cost of surgery and treatment for canine torn knee cartilage HOW TO STASH THE CASH general quidelines on how to squirrel way cash for a rainy day BANK Establish a budget: determine mandatory monthly spending. Keep it accessible: Aregular savings account earns interest and is immediately available. %. Predetermine the amount: Do not touch money Equal to at least the amount of your last rainy-day expense. After reaching predetermined amount: detour additional savings into an account that earns more interest. except for true emergency expenses. JAMMRY Avoid loans to pay for Assess fund annually and adjust if necessary. emergency expenses WHO HAS RAINY DAY FUNDS? Unfortunately, Americans are ill-prepared for emergencies: % who have set aside emergency or rainy day funds that would cover expenses for 3 months, by age group: 56.3% 34.4% 33.2% 32.6% 60+ 39.4% overall 18-29 45-59 39-44 HOW WOULD YOU PAY How would you pay for an emergency expense that cost $400? 48% Easily pay using cash or from checking or savings account or credit card 19% 17% 12% Could not 9% Pay with a credit card 4% expenses Borrow from friends or family over time Weuld have to sell something Use payday loan ! DID YOU KNOW top savings TARGETS for Americans 58% RETIREMENT 52.6% UNEXPECTED EXPENSES 49.1% JUST TO SAVE 26.5% 20.5% PAY OFF DEBT CHILDREN BOOST YOUR RAINY DAY SAVINGS Tips on saving for a rainy day fund: Set up spending categories (food utilities, clothes, etc.) and save $10 per month from each category Cut back on Funnel saved non-mandatory expenses (cable, gym, phone, Internet, cigarettes, alcohol) money into rainy-day fund Rainy Day BROUGHT TO YOU BY: SOURCES: Board of Governors of the Federal Reserve intuit. Quicken System; AARP; Angie's List; American Veterinary Medical Assn.; bankrate.com; Veterinary Pet Insurance; CarMD: Linda Barlow, CFP %24