While you’re being a #boss at your day job, it is important to start looking at your savings situation. One of the most empowering things you can start building is that rainy day fund. This fund will give you the courage to handle whatever, and I really mean whatever life throws at you. Whether that’s a moving out of your place after a bad break up or quitting your job that makes you miserable.

Nothing is more empowering than knowing you have the financial resources to take control of your life, especially in trying situations.

So let’s take a look at how to actually get this fund built. In order to maximize our contributions to this savings account, we need to cut down on our living expenses. Now on to the ever exciting topic of budgeting.

One of my favorite strategies to start with is the envelope system. This system is perfect for reducing discretionary spending. To set up the system, categorize your discretionary spending and then make envelopes for each category. So in a given month I could have envelopes for groceries, clothing, dining out, entertainment, household items, and fun. I can look at previous purchase history to determine realistic amounts to put into each envelope. Then for that month, this is the only money I can spend. I can transfer money from one envelope to another but once the money is gone, there is no more money until next month. You can also do this using various apps like Mint, but I find having to use physical money makes you more aware of how much you are spending.

Another area you should take a look at is reducing your monthly recurring expenses. These expenses creep into our wallets and it is critical to revisit these expenses periodically to ensure you are still using the services you are being billed for. Take a look at your expenses over the last couple months and make a list of all of the monthly recurring charges, everything from the Spotify premium account to cable to that car you just leased. Once you have that list, start seeing what services you no longer use. You’d be surprised how many times my friends have gone through this and they discover some gym membership was charging them monthly that they had not used in years. So once you’ve spent your weekend canceling these services you no longer use, take a critical look at the ones you ‘kinda’ use. For me this was cable, it was bundled with my internet service but I realized I really wasn’t getting that great of a deal if I was not using the service. So I cut the cord on cable, since I mostly use streaming services to binge on my entertainment content. Eliminating each of these little monthly recurring charges adds up and that money can be now put into your savings.

Lastly, some small tips to help stop any leaking out of your savings account. For me the best approach is out of sight, out of mind. And while we are trying to build up this fund, we should put it somewhere it can grow without interference. Personally, I like to only keep a small portion of my savings in the bank account I use for my day to day expenses and put the rest in a brokerage account. Just like you set up direct deposit, you can set up automatic transfers into this account. In a later post I will walk you through investment options for this money, but for now just get that brokerage account open and set up.

So don’t just read this and forget about it and hope that rainy day won’t come. Go block out some time to take another look at your budget and see where you can cut back on discretionary spending and monthly recurring charges. While you’re at it, open up that brokerage account and set up automatic transfers into it. The sooner you can start building these habits and start growing this rainy day fund the less stormy that rainy day will be.