Why Save?
Saving gives you options and protection. With cash available, you can handle surprises without debt and move toward goals.
- Security: Handle car repairs, medical bills, or job gaps.
- Freedom: Education, moving, travel, starting a business.
- Confidence: Less stress when money is planned.
Emergency Fund (Top Priority)
- Starter goal: $500–$1,000 as fast as you can.
- Full goal: 3–6 months of expenses (rent, food, transport, insurance).
- Where to keep it: Separate high-yield savings (easy to access, earns interest).
Don’t invest the emergency fund in the stock market — it must be safe and available.
How to Make Saving Automatic
- Pay yourself first: Move money to savings on payday.
- Automate transfers: Set a recurring transfer (e.g., $25/week).
- Use separate accounts: One for emergencies, one for goals.
- Cut “leaks”: Audit subscriptions, fees, impulse buys.
Where to Put Savings
- High-Yield Savings (HYSA): Best for emergency fund; earns interest, easy access.
- CDs (Certificates of Deposit): Higher interest if you lock money for months/years.
- Brokerage/Investing: For long-term goals (retirement, 5+ years). Not for emergencies.
Mini Exercise
- Write your monthly emergency fund target (e.g., $100).
- Set up an automatic transfer on payday.
- List two expenses to reduce this month and move the savings to your fund.