While many people will say that it is very important to have a savings account, not all will be able to answer the question as to why. A savings account, in some ways, seems to promote some sense of financial security. But while people continue to strive to put money away, few have a clear understanding of what the money in the savings account truly represents.

One of the important parts of dealing with your finances is to set goals for yourself and your money. Stating a savings account with specific goals can help you not only reach your intended financial goals by motivating your for all of the right reasons, it will also help you manage your money better. There are several goals you can set in conjunction with your savings account and here we will discuss some of those goals.

Emergency Funds
Collecting money towards any unexpected emergencies is a great idea to prevent having to use credit cards or suffer unneeded stress to take care of the emergency. Unexpected expenses can sometimes break you financially and having an emergency fund from which to draw needed funds is important to financial stability. This money should remain untouched and gather interest until needed. This money can add up nicely over time if no such emergencies arise and will provide comfort in the event something does spring up.

Short Term Savings
If your family is planning a vacation or a major purchase, you can add money into your savings account to save for these plans. You can save for one or more goals at the same time by dividing available funds and tracking the amounts on paper if you only have one account. By proper pre-planning and consistent deposits into your savings account, no financial goal is unattainable and will prevent you from having to bring in debt worries or credit card concerns to get what you want.

Long Term Savings
Many people are saving with bigger goals. If you want a down payment for a home or a car, you can plan to save more long term in order to reach your goals. This too takes pre-planning and consistency to accomplish but having the cash outright to make your dreams a reality is a sign of financial success.

Annual Expenses
There are several expenses that families will incur on an annual basis that can really cause havoc to your budget. For instance, car insurance and homeowner’s insurance premiums can be cheaper if you pay in one lump sum. Start saving some smaller amounts each month to tackle these bills in full and benefit from the added savings. Take the amount of your bills and divide them by the 12 months of the year. This total will likely be small and much easier to put away than one large amount at a time.

Tags: long term savings, savings goals, savings plan, short term savings

This entry was posted on Saturday, March 28th, 2009 at 6:35 am and is filed under tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

• How to be a Money Strategist to Reach Your Financial Goals (Part 2) How to be a Money Strategist In Part 1 of this article, I explained that I was a "money strategist."  Then, using the financial goals agreed on by me and my wife, I discussed how money strategies and money tactics work together in a personal...
• What Are You Teaching Your Children About Finances? As parents, most people focus on the basic lessons of life, and may not be covering important financial lessons that could last a lifetime. Successful adults are usually those that were trained early on in proper management of their money,...
• Savings Goals In The New Year And Beyond Making just one goal with regards to your savings can make a real difference.  Here are savings goals which can help you have a financially secure and less financially stressful 2010, so know your situation and choose one which best...
• Money market accounts It's always confused me a little when people talk about money market accounts, so I set out today to figure things out. It turns out my confusion was caused by the fact that there are two different kinds of money...
• Beginner's Tips for Smart Investing Investing is an endeavor that can be both challenging and complicated. If you are new to investing, then you may end up paying the price if you do not know where to turn for the most reliable investing tips and...