Start A Sunny Day Fund

This article originally appeared April 28 of last year, but because I’ve had a few gloomy days to contend with the last couple weeks, I thought it might be fun to run it it again for some fresh input.  I’m already planning to start a “Sunny Day Fund” or two soon–life is short.

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?

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?


  1. Thanks for re-posting this. It is a positive take on something we often think of as depressing. But it is true: We can save up for fun things, as well as emergencies!

  2. I’ve had a sunny-day fund that I’ve been building very slowly for a little while. It’s a goal many would view as boring, but I want to invest in some form of sustainable energy for our home somewhere down the road. I’ve been saving $100 per month for this as yet unspecified project for the last two years. The money isn’t piling up very fast compared to the likely budget. But paying our mortgage off early is a competing goal. So we’ll likely have to rely on other funds too when the time is right. The designated savings will help though.

  3. My Sunny Day fund is used for weekend trips, presents for family and friends, and the occasional splurge on myself.

    I started it in college and am so glad I have some money to blow when I need to.

  4. Thanks for the reminder that we need to save for good things, too. Our sunny day fund, which we’ll be starting soon, I hope, will be for a family vacation. We haven’t been on vacation in a couple of years and we’re looking forward to being able to go again soon.

  5. My husband and I always have a sunny day fund. We have family in two countries, and traveling to visit the other side every year is a high priority, so our sunny day fund (we call it Vacation Fund at ING Direct) receives just as high a priority than our rainy day savings… Last year we assigned our tax returns and my husband’s large bonus to that fund, so this year we’re planning an extra trip or two in the U.S. with that money.

  6. Thanks for re-posting! Considering all the doom and gloom we hear on a daily basis, its wonderful to think of budgeting in such a warm light. I’m going to start one with my next commission check! I’m sure my husband will be excited about that!

  7. @Suburban Dollar: No, unfortunately we haven’t taken that vacation yet. My mom’s stroke left her requiring 24-hour care, which I share with my stepfather (with him providing the majority of it, and me filling in after work and on weekends). We hope to at least sneak in a long weekend here soon.

  8. I love this concept. I have a fund right now for a Girlfriends trip. We all need a vacation, and a couple days away from life is exactly what we need.

    Its nice to not just have “just in case” money. I know its not necessarily the best way to think of it, but personally I need that little reward after all my hard work saving, and that’s what my additional fund is for.

  9. This may not be the best strategy, but since I am young I actually have a sunny day fund already going over an emergency fund. I am planning on saving to sign up for a 2 week extreme survival program in Guyana. I know how crazy that sounds but sometimes you just have to live.

  10. I love this post! And yes, we need to provide savings for some fun things also. I created a sub-ING account to save for a MacBook, which I have wanted for a long time.

    I fund it with 50% of anything left over at the end of the month. I save about 15% of my monthly income right off the bat, when the money hits my account. Then whatever is left at the end of the month, I split between my regular ING and my MacBook ING. It will take me almost a year, but then I can buy it without guilt and without touching my main account. Psychological differential, I know. But it works for me.

  11. I call my sunny day fund my attitude adjustment fund. I know me and I know that sometimes when life blows, or I am cranky a little retail therapy works wonders. That kind of “therapy” can really run the train off the tracks when one is trying to get out of debt so I plan for it now. I put a set amount in the account and I can use it for whatever I want–big ticket items, cheap crap…whatever! Although the one drawback (if you could call it that) is that since it is in the bank and earning interest I sometimes don’t want to spend it and keep it in the bank.
    I also have a vacation fund I make regular deposits into.

  12. As a military history buff, one of my dreams has always been to fly in a WWII-era plane. I recently discovered that at the Reading PA Air Show, held every June, you can hop a ride in a vintage B-17 for about $400. Quite a splurge, but I’ve got an envelope in which I’m putting $10 a week; by the time June rolls around I’ll be within $50 of the fee, and can just throw in the rest without feeling too pinched, rather than having to come up with it all at once.

  13. Camping, clamming, fishing, hunting trips. Being able to take an extra day off work for grandkids’ field trips is also special 🙂

  14. I just started my sunny day savings account last week. The nickname of that account is US Open. I am a huge tennis fan and for 2 pair of US open tickets I need around $400. If I start now, I will be able to afford the tickets in August.

  15. I’m in the middle of funding my “funds” right now. I do have a fund for vacations and such but now I have a proper name for it. Once again great post!

  16. With us everything goes into one savings account. But it would be nice to divide it out.

    I guess our sunny day fund would be for our first vacation after the baby is old enough to stay with grandma and grandpa. My wife has never been to Vegas. . .

  17. For some reason my comment didn’t post before, but I was jsut saying that my Sunny Day fund is a vacation fund that I contribute about 300/month to. I feel that if I’m goin to take a vacation it should be worth my while.

    I hope to go to Thailand in the summer time.

  18. I loved the 4 Hour Work Week when I read it last year and I love the idea of the Sunny Day Fund! I started two in January with Suze Orman’s endorsed AmeriTrade Accounts because they will put $100 into each after I’ve made monthly deposits all year. I get a higher interest rate at emigrant direct (2.5 vs. 1), but I love the idea of getting “paid” to save. (Now I’m thinking maybe with the higher interest rate at emigrant I am getting “paid” more? Uh oh. I’m not good at figuring that stuff out!) So I have an idea what those accounts are for (one for EF, one for travel, and one for property taxes – which has always surprised us in the past!) – but, like you, I love the idea of making the “subaccounts” because it’s hard to even look at taking money out of the EF fund even though I think it is well funded (with 6 months of living expenses) – I can get kind of rigid, so the subaccounts would really free up my thinking and make me feel more “free” about taking that sunny day! Thanks for reposting this and sharing your thoughts and all the best to you and your mom in this challenging time!