How much money should you have in your savings account?

In order to figure out how much money you're going to want in your emergency fund, you'll have to look at three things: your spending, your budget and your future needs. Most experts agree that a balanced emergency fund should represent three to six months' worth of household spending (some set this amount as high as eight months) [sources: Orman, Wisebread.com].

Now isn't the time for underestimating your expenditures or overestimating your future income. You need to know what it would take to keep your household afloat for six months if the unthinkable happened, and that means being as honest -- and as liberal -- as possible with your estimates.

If you use online banking, you can simplify this task immensely: Just look at your average spending for the last year or more, and use that information to figure out a total. If you foresee any upcoming expenses, especially if they are long-term commitments like college, remember to include those possibilities. Think about what you'd do about your major appliances or your car if one of them broke down during this emergency time. If you own a home, think about any unexpected expenses that may arise.

If you're like many, this six-month total may exceed your current savings account balance -- possibly by a lot. If you're new to saving and creating wealth, chances are arriving at that total seems overwhelming. It's OK to start small and grow slowly. In fact, it's essential. But just remember your goal here: setting that money aside for when your family needs it most.

This is a great time to look at your spending and try to find ways that you can save. If you aren't saving that money, where is it going? Down the drain, to impulse buys, vending machine snacks and all the other things you don't really need. Those pennies will become dollars, and those dollars will give you the peace of knowing your needs will be taken care of under any circumstances.

Once your emergency fund is complete, you can start looking at other ways of making your money work for you. But it can be hard to stay on track with your savings when you've made sacrifices today for a rainy day that might never come. Setting long-term goals beyond your emergency fund is a good way to stay motivated, but it's not the only one. Read on for a few more ways to stay on the right path.

A lot of us are intimidated by budgeting and really digging into our spending and savings, because we don't want to know how we measure up, or because we don't want the stress of living up to goals that seem unattainable. The key? Change the measuring stick.

Instead of starting with the money you should or shouldn't be spending, just focus on being honest about the realities of your daily life: the money you make and the money you spend. The only goals we don't attain are the ones that weren't realistic in the first place. By starting with the reality and then working to improve it, you'll never have to feel those nervous feelings we all associate with poor spending.

Once you've made your lists and categories, and figured out where every paycheck is going, you can look at realistic ways to keep that money safe instead of watching it walk out the door. Setting sky-high savings goals can sometimes work in the short term, but you're not just saving up for a new TV: You're trying to create an entirely new habit and make it a part of your life. It has to be something you can do every time, not just when you're feeling optimistic.

The important idea here is that you begin to think of saving money as something that you do every month or every other week, regardless of what else is going on. The average family in 2009, after paying all their expenses, had less than $5,000 at the end of the year [sources: Visual Economics, U.S. Tax Brackets]. This is what can happen when you think of saving as something you do with the money left over: You don't save, because there's never any money left over!

Many experts will tell you that the most important habit, when learning to save, is paying yourself first. Get that money out of your checking account and into a savings account immediately. Most banks have automatic savings programs that will transfer money from one account to the other on a regular schedule. However you do it, the point is to teach yourself -- and this can take awhile! -- that once you've decided to start saving, that money isn't yours to spend. So what's next? Read on to find out.

Because it's your money, using your savings account as an emergency fund means no finance fees, no interest to pay and no delay in getting access to it. And since you won't be touching it, unless you really need it, that money can be earning interest for you, getting larger all the time.

But now we're back to the reason you're saving in the first place: to build a store of money. Not to move it around, blow your savings on the next big purchase or even just to cut expenses. The purpose of saving money is saving it: Creating a savings strategy that will help you put your money to work for you.

Paying down debt is the next most important part of your financial plan. Your consumer debts continue to grow with interest, so there's no benefit to keeping them around. While it's nice to have more money to play with in the short term, you're really just adding to the eventual bill, and that's money going right out the door. Being debt-free isn't as exciting as watching those dollars pile up in your savings account, but it feels much better -- mainly because it means you're not giving away your money to finance charges and interest.

Living well means living within your means and not buying anything you can't afford. Saving means spending less than you make, and it's the only way anyone ever builds wealth. That means looking at money in terms of your hopes and dreams, not shame or the scary rat race of trying to keep up. The system is designed to keep you afraid. It's our job to work outside the box and look for ways we can keep the money we earn for ourselves and for our families.

That begins with making sure that you're saving enough to stay safe in case of an emergency, so start stashing away savings right away. For more information on money and saving, click to the next page.