See at a glance savings….

Since there are different reasons why we are saving, there should also be different accounts…. one for each reason…. because we are less likely to dip into any other than the one that is specifically set aside for the intended purpose. It also means that we can, at a glance, see how we are doing with each of our savings goals.

The Emergency account should have at least $1,000. in it. This would allow you to dip into that should a dental problem, or a need for new tires for your car, or a plumbing issue etc arise.  It means that you’d be able to take care of the problem, pay for it and not worry about it again.  But don’t forget to replenish the account should you take any money out…. after all, stuff happens.

You should have an account set up for at least 6-9 months of your take home income… then strive for 12 months.  Loss of a job, can and does happen, usually unexpectedly. So, to have the money you’d usually bring home, already there, will take the added stress of wondering how you’d keep a roof over your head and pay your other bills. However, this does not mean that you start (or continue) to eat out, do take out or any other entertainment spending). And, you should not utilize more money in a week’s time than you normally would. This account is solely for necessities while you’re unemployed. So, live frugally.

If you’re saving for a new house, figure an approximate price range you think you’d be able to afford. Check online for homes for sale in the area you’re thinking of. This will give you an idea of the cost in that area. Now save 20% of the cost of what you think you could afford. Above that, save about an added $5,000. for legal fees at the time of the purchase. And have some extra in the account for lawnmower, patio furniture etc., to complete the picture.

A retirement account is, although decades away, important to start and then continue to add to so that when you do retire, (and it comes quicker than you’d think), you have money set aside to live and do some things you didn’t have time for before. If you have a retirement plan at work which your employer matches, do not neglect to add to that. If not, a Roth IRA is a good start, where you contribute $6,000. annually, paying taxes on it now, and it grows tax free. Don’t rely on social security or company pension plans. Rely on yourself only. Anything else is a bonus.

Be diligent about your savings…. it’s a gift to you.