That’s right, financial climate change is real. It might be sunny today but it’s going to rain soon.

We have a chalk board in our horse barn where we leave messages. For a while now the words on the chalkboard have read, “Manure happens.”

This truth alone is why you need a rainy day fund.

The manure of life comes in many shapes and forms. Illness, accident, death, job loss, divorce, natural disasters, and stuff just breaks whether it is made in China or not. Most people call days when manure like this happens rainy days.

Hence, financial climate change is proven fact. You need a rainy day fund.

But how much is enough? No one knows the answer to this but you. Every individual situation is different.

However, here are some factors to take into account when calculating how big a rainy day fund should be:

• How long it is likely to take you to find other employment? Some careers are easier to replace than others. You will need to replace your income for this span of time.
• Would a job loss most likely require a move? If so, this will cost more money.
• Do you rent? If so, you won’t need as much for repairs of appliances, new windows, or a new roof as you would if you were not renting.
• Is there a secondary income in your household? How much of your fixed costs would the lowest earners income cover?
• Do you have debt you will have to continue servicing?
• How high are your fixed costs? The higher the fixed costs the bigger your rainy day fund will need to be. You did calculate your fixed costs on an earlier Simple Living Rich Life post didn’t you? See some ideas on how to lower your fixed costs here.

Now that you have your figure in mind, how do you manage to accumulate the savings? These tips work. I know because I had a rainy day fund amounting to ~13% of the total income I had brought in over the previous two and a half years when I got married. During this time my only income was a graduate school stipend. Not a high end income to say the least. This money enabled my husband and I to start out our relationship on solid financial ground, rather than in a hole. Here’s what I did, or should I say didn’t do?

To create a rainy day fund try eliminating the following:

• New clothes purchases. I did not buy any new clothes. The only clothes I acquired during this time were a few items my parents bought when they would visit or for Christmas. I could have easily done without even those gifts. Most of us have closets full of clothes, most of which we never wear.
• Paid TV. No cable TV for me. We didn’t have on demand or any other paid TV options at that time but I would not have had those either I am sure.
• Eating out. I simply could not afford this luxury. This includes coffee shops and vending machines.
• Entertainment that cost money. I entertained myself for free with studies, lab work, stomping in the creek behind the University, bike riding, and inviting friends to the sand volleyball pit at my apartment complex. They even brought the ball.
• The latest smart phone. This was easy. There were no smartphones. But, ask yourself, would an upgrade be of any functional value or would it be more bells and whistles? Most likely the later is the case.
• No memberships. I used the University gym. Be a little antisocial until your rainy day fund is in place.
• Vacations. This should go without further comment.
• Paid subscriptions. Note subscribing to Simple Living Rich Life is free. Do it!
• Lessons. Horse lessons would come much later in life. If you have children this would include any extracurricular lessons requiring money. Yes, kids can grow up to be normal productive citizens without paid lessons.
• Paid sports. This was a bit hard as I was a retired college athlete at the time. I did not even sign up for on campus sports due to my student health insurance requiring a waiver to be signed. In short, if manure or rain came in the form of a sports related injury I was stuck with the medical bills. I still cannot believe anyone played under these circumstances. Oh, and kids can also survive and become well rounded without playing organized sports requiring money.
• Junk food such as potato chips, cookies, and candy. They are all expensive and not so good for you anyway. During those two and a half years I was more than a little frugal with grocery money. However, I did manage to buy a package of Oreo’s as my reward. So yes, I broke my own rule, sort of. I reasoned that if I only ate three Oreo’s a day the package would last about two weeks. My husband still tells me of a time before we were dating that he and two other friends were at my apartment. He spotted me sneaking my daily quota of Oreo’s from the closet. Many years later, he asked, “Why were you sneaking the Oreo’s?” I simply responded, “I couldn’t afford to feed the three of you Oreo’s. Besides how would I explain there was a quota?”

Finally, remember the manure of life doesn’t stop flying just because you accomplished meeting your rainy day fund goal. It will continue to fly. With this in mind be sure not to get in too deep with your fixed costs making sure you can continue a small monthly payment to your rainy day fund in order to maintain the balance. Rather, think of indulging in non-fixed costs areas you have been neglecting that are more flexible to revert. Activities such as taking a nice vacation, or buying enough cookies for family and friends for example.

Before we leave I have to say if this all sounds a little dismal or even militant to you, believe me it is not. These were minor sacrifices at a time in life when it was easy to do without. The rewards we have reaped from never putting ourselves in a financial hole through the years following have been immeasurable. Having a rainy day fund brings joy and peace. You might even say it is one way in which money can buy happiness.

Grab an umbrella or a shovel, because whether you choose to call it rain or manure it’s sure to be coming your way. Your rotten days will be better with a rainy day fund.

Are you experiencing financial climate change? Is there something different you have sacrificed for a rainy day fund? Share it so we can all benefit from great ideas.

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