Savings #
Savings are any amount of money that you have made but not spent over a given time. They differ from investments because savings should have zero risk attached.
Savings may be used to prepare for emergencies in the future, or even to make bigger purchases down the line (new house, new car, etc.)
The main criteria you should look for in a savings vessel are:
- zero risk of loss
- quick liquidity (easily convertible to cash)
- a reasonable amount of interest (yield)
There are a couple of different ways that you can store your savings. Read through the articles in this section for a description of each.
General Guidance #
Some general rules of thumb when it comes to saving money:
- Generally speaking, you should keep 3 to 6 months of expenses in savings for emergency purposes.