Building Your “Rainy Day” Fund
How prepared are you if there was a financial emergency?
According to the recently published National Financial Capability Study, only 36 percent of young adults (ages 18–34) report having set aside three months’ worth of living expenses in an emergency fund. Nationwide, just 46 percent of all adults meet this basic “rainy day” threshold—a six-point drop since 2021 (NFCS, 2025).
Why this matters for 18-29 year olds
Without at least three months’ worth of expenses tucked away, a car breakdown, medical bill or sudden job loss can quickly spiral into unmanageable debt. For young adults just starting to build careers—and often carrying student loans or renting in high‑cost markets—this safety net is the difference between weathering a setback and sliding into financial fragility.
Here are five actions you can take to build up your rainy day fund
Aim for a $1,000 starter fund
Before chasing the whole three-month goal, focus on saving $1,000. This smaller cushion covers most minor emergencies and builds confidence in your ability to save.Automate your savings
Schedule an automatic transfer—no matter how small—from each paycheck into a separate “rainy day” account. Out of sight means out of mind, and it prevents you from spending what you meant to save.Cut one recurring expense
Identify a subscription or service you can pause for a month and funnel those savings into your emergency fund. Even $10–$15 per week adds up over time.Use windfalls wisely
Tax refunds, bonuses, or gifts can turbocharge your emergency fund. Even consider letting family know that for holidays and birthdays, no gifts, no gift cards…just cash. It’s not forever, but until you build up your emergency reserve. Commit at least half of any extra money toward your “rainy day” goal before allocating it elsewhere.Track progress publicly
Whether in a shared spreadsheet with friends or via a simple savings‑tracker app, making your goal visible helps maintain momentum and accountability.
Reference
Lin, J. T., Bumcrot, C., Lusardi, A., Valdes, O., Mottola, G., Ganem, R., Sarver, S., Kieffer, C., McLaughlin, R., & Walsh, G. (2025). Financial Capability in the United States: Results from the FINRA Foundation’s National Financial Capability Study (6th ed.). FINRA Investor Education Foundation.
