How much money should you have in your savings account?

Staying On Track With Saving

Once that money's in your savings account, consider it under lock and key -- hands off unless you run into an emergency!
Once that money's in your savings account, consider it under lock and key -- hands off unless you run into an emergency!

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.