"There is precious treasure and oil in the dwelling of the wise,
but a foolish man swallows it up." — Proverbs 21:20
Everyone needs a savings reserve — it's an emergency fund for dealing with the unexpected. By having money set aside and available, you can deal with financial emergencies without having to take on more debt. How big should an emergency fund be? That's up to you, but financial planners typically recommend setting aside funds equal to three-to-six months' living expenses.
Linked below are articles and resources that will help you build a savings reserve. For the best current rates on savings instruments, check the "Money Rates" table in each monthly issue of SMI.
Read these first
Save by Paying Yourself FirstBy Austin Pryor
Paying yourself last, out of your leftovers, is the most common reason people fail to meet their savings goals. Try these two paths to automated savings, and watch your saving habits turn around in no time.
Selecting The Right Savings Vehicle For Your Time HorizonBy Mark Biller and Joseph Slife
To maximize your savings, it's important to match the correct savings tool with your expected time frame. These six tools offer a solution for every savings need.
Resources
Bankrate.com's "Compare Rates" PageCompare rates on various savings vehicles (updated daily)
MoneyAisle.comAn auction site that can help you find higher CD and savings-account rates.
Supplemental Articles
The Prudent Path: Saving Before InvestingBy Austin Pryor and Joseph Slife
Trying to reach an emergency-savings goal of $10,000 can be a tough task. Sometimes it seems like you'll never get there. So you may wonder, "Is all this caution about having a sizeable emergency fund really necessary?"
How Much Emergency Savings Do You Really Need?By Mark Biller with Joseph Slife
Think you don't need an emergency-reserve fund? Think again.
Using Bank Certificates of Deposit to Build a Savings LadderBy Austin Pryor
The uncertainty of future interest rate moves makes it difficult to know what the best savings strategies are. One approach that helps eliminate some of the guesswork for savers is building a CD ladder.
Welcome Aboard!
- Overview
- Level 1 — Getting Debt-Free
- Level 2 — Saving for Future Needs
- Level 3 — Investing Your Surplus
- Level 4 — Diversifying for Safety