How to Start a Rainy Day Fund


A large part of being financially healthy is making sure that you have enough money set aside to help you get through rough times and small inconveniences without going into serious debt. This is known as having emergency savings or a rainy day fund.

Without one, what will you do if your car breaks down and needs repairs or if your pet suddenly needs surgery? Rainy days will happen — so let’s get you prepped and ready when life throws a curveball. And if you need cash along your journey, you can lean on our 0% APR Instacash advances and Credit Builder Loan.

Know how much to set aside

You’re on the right track as long as you’re putting something (anything!) away from every paycheck. The most important thing you can do is make saving a habit, even if you feel like your savings pace is turtle-slow. Even if you can only save $1 a week right now, do it. 

But what if we help you figure out exactly how much you need given your current spending and circumstances. You could use our tool below to find out

Don’t feel like you need a lot of money to open a savings or investment account — just getting started is a great first step.

Start by setting a goal for your rainy day fund. If that’s $100 or $1,000, you’ll need to budget so you can plan for how you intend to save that money. 

Tip 1: Make a Budget.

The key to saving is budgeting. Know how much money is coming in and going out. To make a budget, list out all your expenses in categories such as rent, utilities, food, transportation, entertainment, and of course, savings. Separate your expenses into wants and needs, and make sure you pay for your needs first!

Compare your expenses against your income coming in each month. Making a budget means you know how much you can afford, how much you can save, and what areas you can cut back on to reach your goals. Get started today! You can use simple paper or a free budgeting template online.

Tip 2: Pick One Non-Essential Expense to Cut

When you make your budget, it’ll probably stand out to you where you can make a few cuts to save money fast. Everyone has an expense that they keep making even though they know that the money would be better off saved or invested. If you get a coffee at the drive-through every day or get your nails done every week, or maybe you always forget to bring your lunch to work and end up spending money at the cafeteria.

Whatever your guilty pleasure or mindless expense is, make a resolution to stop spending and start saving it instead. One of our members saved $1,400 in a year just by skipping her daily iced-coffee run!

Tip 3: Take Advantage of Financial Tools.

The MoneyLion app is full of resources to help you save money. From providing daily personalized savings tips to Lionomics financial education, it gives you everything you need on your financial journey. Use the Financial Heartbeat feature to monitor how well you’re saving. Much like a fitness app, this feature will tell you how financially healthy you are. It scores your savings numerically and by color so you can easily track your success. 

The MoneyLion app also gives you tools to get more from your money, a key step to building your rainy day fund. You can get a account, so you get to keep more of your money, and a fully managed investment account with no management fees or minimums to help grow your money. Plus 0% APR Instacash advances, so when you need extra cash, you won’t touch your savings.

Tip 4: Put Savings on Autopilot with Auto Invest.

Consider investing instead of sticking your hard-earned money into a plain-Jane savings account with very little interest. You work so hard for your money and you should make it work just as hard. 

Sign up for a fully managed investment account with MoneyLion and let us help your savings grow. This investment account is great because there are no minimum fees and everything is personalized based on how much risk you want to take and totally managed for you. You don’t have to do any work except set up the regular deposits. 

Auto investing is coming to MoneyLion very soon, so you can set up any investment amount to recur at any frequency. Auto saving is the easiest way to build a rainy day fund.

Tip 5: Explore the SteadyIncome Portfolio.

Don’t like to take risk when investing? Consider the SteadyIncome Portfolio through MoneyLion. This very conservative portfolio allows you to invest in bonds in exchange-traded funds (ETFs). Bond ETFs are ideal for those who prefer to invest with stability and low costs. Your savings can still earn interest without involving much risk at all.

Here’s how to invest in SteadyIncome once you’ve opened a MoneyLion Investment account:

  • Select “Finances” on your MoneyLion app.
  • Select “Portfolio.”
  • Tap on the “Edit Allocation” button.
  • Use the risk slider to choose “SteadyIncome.”

Step 6: Help Your Money Grow.

If you opt for a savings account that earns you little interest, you could actually be losing money over time because your money isn’t growing with the rise of inflation. Investing helps to grow your money over time. The sooner you begin investing, the more time your money has to benefit from compound interest.  

Make Your Money Work Smarter, Not Harder

MoneyLion makes it so easy to save and invest and provides you with everything you need to get started. It’s not only about saving — it’s about making sure your savings also make money by accruing interest or returns.

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