5 Reasons All Single Moms Need a Rainy Day Fund

Listen mama, there’s no denying that you’re a superhero. You juggle a million things at once and often put our family’s needs before our own. But even superheroes encounter unexpected financial emergencies. So trust me when I say that creating a rainy day fund is essential — especially for superhero single moms who provide the primary income at home.


What Is a Rainy Day Fund?

One of the most significant stressors in life is financial insecurity, and nothing is more stressful than the thought of not being able to provide for your children. A rainy day fund can give you financial peace of mind, and having one is essential for maintaining your financial stability.


A rainy day fund is an emergency savings account that you can use for unexpected expenses like car repairs, medical bills, or home repairs. Whether it’s a small bump in the road or a cataclysmic event, emergency money can help cushion you from the unexpected expenses that pop up throughout your life.


Saving you from an unexpected financial emergency is not the only reason to have one—rainy day funds also have the potential to transform your financial future. A cash reserve such as a rainy day fund can help you navigate both emergencies and economic opportunities with ease.


Is a Rainy Day Fund the Same as a Savings Account?

There are the financial events you plan for in life—college tuition, vacations, and homeownership, to name a few. But, on the other hand, there are unexpected economic events that can potentially disrupt the big plans you’ve been looking forward to. 


Not all savings accounts are created equal, so a rainy day fund should be separate from your regular savings account. Likewise, your emergency fund should be easily accessible if you need it but not so easy that you’re tempted to spend it on non-essentials.


At the very least, you should keep your rainy day fund in a separate savings account from your checking account. Of course, keeping your emergency fund in a traditional savings account is perfectly fine, but consider parking your money in a money market account to grow your savings passively. 


A money market account will allow you to reap the benefits of a higher interest rate. Money market accounts typically come with debit and checking privileges. A high-yield online savings account is also a great way to grow your savings passively. 


Top Ten Reasons Every Mom Needs a Rainy Day Fund:

  • Avoid going into debt.

One of the most significant benefits of having a rainy day fund is that it can help you avoid going into debt. If you have an emergency and don’t have the cash to cover it, you may feel tempted to put it on a credit card. However, relying on credit can be a dangerous cycle to get into and hard to break out of.


For example, let’s say you have a $500 emergency expense. If you put it on your credit card with an 18% APR, it would cost you $90 or more in interest over a year. However, if you have a rainy day fund, you can avoid paying this interest and use the money exclusively to cover your emergency expenses.


  • Avoid taking out a high-interest loan.

If you don’t have a rainy day fund and an unexpected expense comes up, you may also be tempted to take out a high-interest loan to cover the cost. Unfortunately, loans can put you in a difficult financial situation, as you’ll be responsible for repaying the loan plus insane amounts of interest. 


  • Build your credit score.

Listen, mama, your credit score is critical for your long-term financial health, and it’s challenging to build it back up once it crashes. A good credit score can help you buy a home or car, rent in a better neighborhood, access better credit card options, and avoid security deposits on things like utilities. 


If you have a rainy day fund, you’re less likely to need to rely on credit to cover unexpected expenses, which can help you avoid damaging your credit score.


  • Improve your financial habits.


Do you want to know one of the best parts of creating a rainy day fund? The mere existence of having a financial goal can help you improve your financial habits. When you’re saving for an emergency, you’re likely to be more mindful of your spending and make a determined effort to save money.


For example, you may start cooking at home more often to save money on eating out. Or, you may start looking for deals and coupons to save money on groceries. These solid financial habits can help you long after establishing your rainy day fund. 


  • Turn your rainy day fund into a down payment.


I want to dream big, lady. If you stay consistent with it over time, your rainy-day fund can snowball into a considerable sum of money. Once it reaches a certain point, you can use it for a down payment on a house


Homeownership eliminates the need to throw money away on rent each month by helping you build equity and stability for yourself and your children. If you already have a home, you could even start thinking about how to invest your rainy day fund to create long-term generational wealth to pass down to your children. 


How Much Money Should I Have in My Rainy Day Fund?

The amount of money you should have in your rainy-day fund depends on your unique financial situation. However, the average emergency fund should be large enough to cover three to six months of living expenses.


Starting small is okay if you’re just starting to build your liquidity. Even weekly contributions of ten or twenty bucks will add up over time. As your income grows, try to dedicate more and more to your rainy day fund each month. The more financially stable you are, the less you need to keep stashed away for emergencies.


When Should You Use Rainy Day Funds?

The definition of an emergency is subjective. Ask yourself these three questions if you’re unsure about whether you should tap into your emergency funds: 


  • Are these unforeseen circumstances?
  • Is it necessary to draw money out of the fund?
  • Is the money needed urgently?
  • Do I have enough equity and liquidity to invest my rainy day savings in something else?

Final Thoughts

Take the first step towards financial stability by creating a rainy day fund. You’ll be glad you did when an emergency comes up, and you’re prepared to handle it without going into debt or taking out a high-interest loan.


Start small, and then increase your contributions as your income grows. Soon, you’ll have a healthy emergency reserve that can help when you need it most. 


What tips do you have for single moms trying to build a robust rainy day fund? Share in the comments below!


My name is Jenna and I am the founder of Single Mom Spot. I've been a single mom for almost 10 years now. I'm a Christian and mama to two kids that I love like crazy. I started this site because I know how difficult single motherhood can be...and also, how beautiful. I believe that single motherhood helped make me into the best version of myself as a woman and mom. My hope, is that through a connection point like Single Mom Spot, women can share their experiences and grow together. What an amazing thing if every single mom could live her best life as a woman and mother right now, in the middle of her most challenging life circumstance. How bold. How beautiful. How unforgettable. Thank you for reading and supporting Single Mom Spot.