Life is full of unexpected surprises and often these can be hard to manage at the time. A Financial Industry Regulatory Authority study has found that 34 percent of Australian households would not be able to pull together $2,000 within a month if they had to.

That amount would usually only cover minor emergencies as well, not long hospital stays, natural disasters or injury or illness that meant time away from work.

There are ways you can prepare for these circumstances, though, from small emergencies like a car breakdown or appliance malfunction to major education and health expenses that can blindside us all.

How much should I have in savings?

Ideally, you have enough in savings to cover for an emergency rather than just a rainy day.

What is the difference? A rainy day fund is for those disruptions like an unexpected bill, repairs to the family vehicle or your fridge blowing its motor.

The rainy day fund should be part of a larger emergency fund, though, which takes into consideration major life events that could see you with no income for a lengthy period of time.

There is no set dollar figure attached to an emergency fund, but as a rule of thumb you should aim to have three to six months’ worth of expenses tucked away to give you a buffer if things go terribly wrong.

Save money, any amount will do

If you can only afford $10 a week right now, still ensure you are saving that money by putting it into a dedicated, high interest bank account.

Set these payments up so that they are automated and will definitely go across each week.

Not only will these small amounts grow over time, it will make saving a habit for you so that when you can afford to save more, you will be conditioned to doing so.

As the old saying goes, there is no time like the present.

Choosing the right bank account

Tucking money under the mattress or into the piggy bank is all well and good, but your money will not accrue interest over time.

Shop around the banks and find the high interest savings account with the best returns and tuck your money away there. As long as you are not accessing it outside of an emergency, it will grow over time and help you reach your savings goal faster.

Adjust your spending habits

There are many simple ways that we can tighten our financial belt.

From meal prepping to avoid costly takeaway lunches to avoiding impulse purchases, there are ways you can extract more money to save.

The best way to work this out is to build a strong budget and stick to it. Speak to a financial professional about ways to budget for your lifestyle.

Low risk investment

There are many ways to invest that have smaller returns than others, but are extremely low risk.

But tucking your savings into safer investments you can often get higher returns than the bank’s interest rates.

Speak to your finance professional about how you can get started.

Take a leaf out of Marie Kondo’s book

One of the biggest lifestyle shows right now is Tidying Up with Marie Kondo, which aims to bring joy to people by decluttering their homes and making cleaning and living simpler.

There is another major benefit to doing this. Many homes have thousands of dollars’ worth of unwanted and unused items that could be sold to contribute towards savings.

How small business owners can use Capital Raising to prepare for a rainy day

Most people know they have equity in the property that they own, but did you know that small business owners can unlock equity in their assets as well?

You can tap into this equity on a rainy day, when unforeseen expenses arise or other fees, taxes or expenses come around that you don’t have cash on hand to pay for.

The best part? There are taxation benefits in Capital Raising as well.

To learn more about Capital Raising and preparing for a rainy day, contact Morris Finance today.