A good first savings goal is to put aside three to six months of living expenses as a cushion against emergencies. Keep your financial cushion and any funds you plan to use in the near future tucked away in an easy-access savings account, short-term certificate of deposit (CD), or money market account. See Savings Options. Make sure the bank or financial institution where you keep this money is insured by the Federal Deposit Insurance Corporation (FDIC), which protects the money you have on bank deposit up to $100,000.

Your next step is to figure out what your long- and short-term financial goals are. Do you want to save to buy a home? Are you trying to accumulate money for a child’s college education? Are you planning for retirement? Are you saving for a vacation? Think about it, decide what your goals are, and write them down. Once you have a list, you can prioritize the items in terms of their importance to you, and make an estimate of the time frame (e.g., six months, ten years)— the amount of time you have to reach the goal.