Save It for a Sunny Day

The other day I read an excellent article that provides some ideas for things to do with a tax refund. I enjoyed the list because it was outside of the normal, “pay off debt, start an emergency fund” standard listing of things to do with the upcoming tax rebate checks. One item in particular really caught my eye – “add it to your sunny day fund.” What a refreshing concept. I think way back in the annals of personal finance journalism someone first wrote that we should all save for a “rainy day.” It is one of those timeless axioms that we hear repeated over and over from anyone identifying themselves as a financial expert. But what about saving for sunny days, too?

sunny day
photo by: NZ Alex

Starting a “Sunny” Day Fund

If rainy day funds are for negative life experiences, it only makes sense that sunny day funds are for the good times. Maybe you save in a sunny day fund for some tickets to a place you have always wanted to visit, or for that cruise you have been promising to take your family on for years. Maybe it is something small, like saving up to take your kids to the zoo, or to take a pottery class. Whatever it is, the sunny day fund doesn’t have to be limited to just material items.

I’ve been reading The 4-Hour Workweek by Tim Ferriss and in it he advocates taking planned sabbaticals at regular intervals. A sabbatical basically involves walking away from your career for an extended period of time, usually six weeks to three months. At one time it was a growing perk, particularly in highly competitive industries with high burnout rates. The thought was that offering employees a chance to take a break made them less likely to take a permanent one.

It is hard to imagine taking an extended break from work on purpose! Most people who receive a pink slip desperately need to be re-employed because they typically have a stack of bills, and very little in savings. Imagine that same scenario if you had very few bills, and a large amount saved in a sunny day fund. No worries, right? You could live off the severance package, take an extended break to do some traveling, or whatever your heart desires, and take your time finding a new job. It is an exciting concept, but one that most people find unattainable because they continue to live paycheck to paycheck. If this is you, start thinking about ways to reduce your expenses and/or increase your income to fund a “sunny day” account.

So What’s in Our Sunny Day Fund?

I recently wrote about how much I was enjoying my new savings accounts at ING Direct. One of the best features is the ability to create “subaccounts” and give them a nickname. Our current list of subaccounts includes Emergency Fund, Christmas Shopping, Orthodontics, etc, all based on some upcoming expenses that we need to be saving towards. In addition to those accounts we also created a “Sunny Day Fund” where we are currently saving towards a vacation destination that we would like to take the kids next year. I think I’ll take Nickel’s advice, and use some of our upcoming economic stimulus payment to get a head start on the sunny day fund balance.

Ask the Readers: What kinds of things would be in your “sunny day” fund?

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  1. I’d like to echo KMunoz sentiments. We just bought a new (to us, anyway) car with our tax refund and some of the blogs make me feel like a horrible person for it.

    Our sunny day fund is actually the account for the down payment on a house. Not as fun as a vacation, but it will be a beautiful day when we can stop paying a ludicrous amount of rent for a teeny apartment.

  2. I love this idea! The sad truth is that I’d be much more motivated to save for a sunny day than a rainy one. (What can I say, I’m the eternal optimist!)

  3. The sunny day fund sounds like a good plan! It’s always a good idea to use your money for the important things in life – like having experiences with someone you love. 🙂

  4. I love the idea of a sunny day fund! It sure puts a much more positive spin on the whole idea. How do you like The 4-Hour Workweek? I read it earlier this year and really enjoyed it. Now I just wished I could figure out how to take a month long sabbatical! Thanks for the mention!

  5. On this rainy day here in D.C., it’s a nice change to read about someone saving for something positive and fun. Sometimes I get burnt out reading PF blogs when the bloggers write about every little move they make with their money and debt reduction. Nice to see someone acknowledging that money is not evil and yes, it’s okay to use it for something other than debt!

  6. That is exactly what we do, but I never thought of calling it a “sunny day” fund. It isn’t much, but we have been automatically depositing $25 into a savings account for years now. I am hoping to have enough for our ten year anniversary (2 years away) to go somewhere really cool using the funds from this money.

    Great tip!

  7. @KMunoz and @Kali: I understand your points regarding personal finance blogs taking on a negative, even self-righteous, tone at times. I recognized last week I was putting out one rant after another, and I have decided to make more of an effort to be positive.

    I can’t promise that I won’t still occasionally vent to readers, but I will try to refrain from doing it in a way that makes any of you feel badly for it. I wouldn’t want to read a blog that beat me up for my own decisions, so I wouldn’t expect you too, either. Thanks for your comments, and for being Frugal Dad readers!

  8. Great article FD. Everyone always saves for a rainy day but never a “Sunny” day. Our “Sunny” Day fund is a trip to Disney World. Unlike everyone we know, we have never been before and would like to take the kids while they are still young enough to really enjoy.

  9. I’m of the ‘pay off debt—increasing savings’ persuasion. However, I’ve decided to use a portion of my rebate check for something fun, that I will use on sunny days: I’m going to buy a used bicycle, to ride to the transit center and eventually all the way to work!

    At first, I felt like I was cheating by not using all $600 to pay down debt. But the sheer joy I felt when I made the decision to make a purchase that will help me exercise more, drive less, and save money on gas was worth it!

    Thanks for the post!