Ask Lourdes – March 2014

The Rainy Day Fund

by Lourdes Cortez

In an uncertain world, saving money can be a daunting task.  For most of us, savings is one of the hardest things to do and certainly not always the priority it should be. 

In August 2011, CNN Money published an article stating that 64% of Americans didn’t have enough savings for a $1,000 emergency fund. This is an alarming statistic and an unfortunate truth even in today’s economy.  But what about those emergencies, or even those long-term goals you may have on your bucket list? 

Well, here are a few strategies you may consider to gain control over your financial situation.  

First, create a plan of attack. Whether you are saving for an emergency, a short-term goal, or for a future long-term goal, the basis of creating a good plan is putting it down on paper. There are different ways to create this plan. For example, one could use an excel spreadsheet to map out their monthly income and expenses or a simple budget form used by a financial planner.  Start by taking the time to write it down. published an article about a study of last years’ graduate students at Harvard, which proved that 3% of the students, who wrote down their goals, earned ten times as much as 97% of other graduates.  Think it, write it down, and make it happen. 

If you’re the type of person who is visual, you might want to add colors for different expenses and really make it aesthetically pleasing to help soften the daunting task of examining your expenses. You can even add photos of the goal(s) you are saving for. 

Second, open a bank account whose purpose is to host this money. This account is not to be touched, and you must pretend it doesn’t exist, unless you are depositing money or using it for its intended purpose! This may sound like an easy task, after all out of sight, out of mind, but it will probably be the most difficult part of your plan. 

Third, make it easy to deposit but hard to use.  The easiest way to save is use a direct deposit option and start with small increments like allocating 5-10% of your paycheck. Do what makes you feel comfortable so that you feel good about what you’re saving and not feel stress about the money you’re missing. 

Fourth, limit access to the account. For example, if you enroll in on-line banking, limit viewing your Rainy Day account and rely solely on e-statements to monitor your savings. Also, do not issue a debit card to the account, which may tempt you to use your savings. 

Finally, if you’re saving for no particular purpose besides having that extra financial cushion, set a definitive goal such as “I’m going to save $300 in 6 months”, which is the equivalent of $50 a month.  Every time you meet your goal, give yourself a pat on the back and set a new goal! 

Saving is an amazing accomplishment and creates a sense of security. But more importantly, creating a Rainy Day Fund will provide you and your family, the financial security you need when you need it most. 

Send your questions or comments to 

 Lourdes Cortez, President and CEO of North Jersey Federal Credit Union, hails from Paterson, New Jerseyand is the first Latina CEO of a credit union in New Jersey.  In 1984, she began her career at North Jersey Federal and served in several C-level roles before being promoted to her current position in 2005.  In 2004, she was promoted to Vice President of Operations and soon thereafter became Senior Vice President. Lourdeswas named the President and CEO of North JerseyFederal in 2005. Lourdeswas honored as a “Woman of Achievement” by the Girl Scouts during its Centennial Celebration in April 2012.  She was also named 2010 Star Award recipient by North Jersey Regional Chamber of Commerce and one of NJ Biz’s Best Fifty Women in Business.