Most of us have heard that we should save for a rainy day. You know, a fund that will help you with anything, like car repairs or medical emergencies. But how about saving for sunny days? It's so easy to top up your credit cards for a much-needed vacation or for that last-minute wedding gift you forgot to buy. That's why you also need to have a sunny day savings fund.
A sunny day savings fund is a rainy day savings fund in reverse. It's for all those wonderful things you want to spend money on – without going into debt.
Uses for a Sunny Day Savings Fund
An incredible vacation
We love vacations, but they can get expensive quickly, even if you follow money-saving travel tips. According to a study by CreditDonkey, the average cost for a vacation for a family of four costs around US$$4,580. So basically about US$ 1,145 per person. It's a nice chunk of change to put on your credit card if you haven't saved up for your fabulous getaway.
Furthermore, you end up paying even more due to the high interest on the cards. Having a sunny day savings fund will stop you from accumulating debt – so you can start looking for guilt-free beach vacation options.
A Dream Wedding
According to a study by Value Penguin, the average wedding cost $ 20,000 in 2020. Of course, the last thing you want to do is start your new life together in a pile of debt.
Sure, there are ways to have a beautiful wedding on a budget, but you still need to save some money to pay for it. If you're recently engaged, there's no better time than starting a sunny day savings fund for your dream wedding.
Taking a break from work
Wishing you could take a gap year or mini-retirement? If you live paycheck to paycheck, like more than half of Americans, this is unlikely to be feasible. But if you plan right, you can save enough in your sunny day savings to take time off work to enjoy life a little.
Let's say you earn $ 1,000 per week. If you can save an extra $4,000, you can technically afford to take almost a month off work – as long as you get your bills paid in advance.
Treating yourself
Do you find it difficult to take care of yourself, even though you work hard and deserve it? According to Chris Browning of Popcorn Finance, even when you're trying to prioritize spending wisely, sometimes it's important to spend on yourself. Why? Because if you completely deprive yourself, you are doomed to not achieve your goals. So saving for something you want is a great way to treat yourself without the guilt (and debt).
What did you want that was a little out of reach or that you couldn't justify the cost of? Maybe a spa day or maybe remodeling your living room. Whatever it is, a sunny day fund can allow you to indulge in it – because you have the money saved to do so.
How to Save for Your Sunny Day
Now that you have some ideas for what you want to save, you need to know how to do it. Follow these four steps to make saving less difficult and more enjoyable.
Discover the value of your goal
The first thing you need to do before you start saving? Set a goal. Are you saving for your dream wedding or a wonderful vacation destination? The first step is to calculate the cost of your future “day in the sun”.
For example, if you are planning a vacation in California. check current costs for airfare, hotels, car rentals, etc. Of course, these rates are subject to change by the time your “sunny day” arrives, but getting a ballpark total will be a big help in starting to save for your goal.
Break it down into smaller goals
To stay motivated and achieve your goal, break big goals into smaller goals. Let's say you want to save $ 5,000 for a vacation and want to go in six months. Divide this $ 5,000 by six months to get $ 833.33 per month. Then divide $ 833.33 by 4 (the number of weeks in a month) to get a weekly sunny day savings of $ 208.33.
When you take the value of your goal and divide it, it becomes easier to achieve it – or at least know how long you will need to postpone that “sunny day” to make it achievable.
Have a good time
Everything gets so much easier when you make it fun, including saving money. One of the easiest ways to save is to try a money-saving challenge. Social media is full of ideas and challenges, like the 52 week challenge where you save US$ 5,000 in a year; the $ 5 note challenge, where you save every $ 5 note you receive; or the time saving challenge, where you save the number of dollars that corresponds to how high the temperature was that day.
When you turn saving into a game, it eliminates stress – and can even make you look forward to it.
Earn more money
The quickest way to fund your sunny day savings, of course, is to make more money. You can increase your income with a side hustle. Some side hustles can bring in hundreds to thousands of dollars a month; for example, the average salary for a freelance writer is $ 24.23 per hour.
Passive income is another great way to grow your savings – one that will continue to pay dividends long after the initial setup. Whether it's as big as becoming a real estate investor or as small as selling a product on Instagram, there are ways to make money without putting in many hours of work beyond the initial investment.
