Saving Money – Short Term

The smart money manager has a strategy for saving money that includes multiple options.  The first of these options is a short-term account.  This account is designed specifically for easy access.  That is, you need this money to be available for life’s little emergencies that cannot wait.  You can also call it a ‘rainy day’ fund.

How Much? This depends on your comfort level.  Usually an amount between $1,000.00 and $2,500.00 is a good benchmark.  This money will be easy to get to, and so it will be easy to spend in a weak moment.  So, it is wise not to keep too much in the account.

What For? You will breathe a sigh of relief if your refrigerator breaks down and you have the cash to fix it or buy another one.  Or, an unexpected automobile repair can tap this money.  Anything that is considered a small emergency can be a good reason to keep this money available.

Mattress Money. Some resort to the old strategy of hiding this small amount of cash in an inconspicuous place in a house.  This is not really very wise, but it is understandable.  This way, even if the banks are closed (because of the weekend or a holiday) you can still have access to the money.   But, you also stand the chance of having it stolen during a break-in.

Also considered short-term savings is a money market account.  The money market account is more difficult to get to, but you can have a debit card assigned to the account so that withdrawals can be made easier.  Or you can also write checks on the account.

You can use these steps to help fund your short-term savings accounts:

• Put aside a small amount out of each paycheck.  Even $10.00 will help
• Have a specific amount automatically deducted from your paycheck and deposited into a savings account.
• Have a garage or yard sale and use the proceeds to build your account
• Use coupons or other discounts when you shop and then take the extra that you would have paid and put it into your account.
• Cut back on extras like eating out or entertainment, and then place that money into your account.

There are lots of ways to get started.  Be creative.  But do not leave this task undone.  Life will deal you the little blows.  Have some money stashed away to deal back.