What Is A Rainy-Day Fund?
A rainy-day fund is reserved for unexpected events that can impact your financial situation. This can include divorce, job loss or any medical expenses. Zimmer had two years’ worth of salary stashed away in a rainy-day fund that she knew she could tap into until she found more work.
“Having that money made things a lot easier to deal with,” she says. While Zimmer had been building up her fund for years, according to Bankrate.com1, only 44% of Americans have more than three months of savings put away in an emergency fund. Most know they need one – they’re aware that medical bills pop up, that cars need to be repaired and work situations can change – but many struggle with identifying how much they need to save, says Paul Golden, a spokesperson for the National Endowment for Financial Education.