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Savings accounts are basically your emergency fund. They are for
those times of need. What happens if you lose your job or your spouse
loses their job? What if your car major repairs? What if someone
in your family needs emergency medical treatment?
You need to be prepared for such circumstances. Never, never think
that you are immune to the need of liquid assets. People that do
not maintain some sort of liquid resource are gambling with their
families well being.
The common thought is that you should save a minimum of six months
of expenses in your savings or short-term savings. To achieve this
you should budget your money accordingly.
Don't be fooled into thinking that online savings accounts are
the only financial instrument you should use. Once you reach your
six month expense budget and your short-term savings, you should
look for longer-term, greater interest-bearing financial instruments.
Year-long CDs and government bonds. Depending on the market though
savings accounts online in many circumstances will match or beat
the rates of even these tools. If you watch the rates set by the
Federal Reserve Rates you can gauge which instrument is right for
you.
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