Most of us appreciate a sturdy umbrella on a stormy day. We don’t always know when we’ll encounter rain, but unless we live in the desert, we know that eventually rain will fall. So we buy umbrellas, raincoats and boots to protect ourselves against the inevitable downpour.
Rainy day funds, or emergency savings, protect us too. We can’t always predict when we’ll have a money emergency, but we know that eventually a financial crisis will arrive. Setting aside money in a rainy day fund shelters you from a financial storm.