In a perfect world, we would always have enough income coming in to cover our regular monthly expenses as well as some emergency expenses. Unfortunately, unexpected circumstances can disrupt the best-laid plans. Rainy day funds provide resources for emergencies that, if unprepared for, can throw you off your path to financial wellness.

Setting up a Rainy Day Fund

• Budget: Include saving for a rainy day in your monthly budget.
• Rule of thumb: Accumulate 6-9 months of living expenses.
• Keep this money liquid: Consider cash and cash-like investments. Examples include savings accounts, checking accounts, money markets and certificates of deposit.
• Replenish the fund: Be sure to replace the savings when you draw from the fund.