An emergency savings is a crucial tool that you can use to give yourself security. It is money that can  be used for emergencies and trouble that you do not see coming. Everyone will face a hard time at some point in their life and a savings account is what you need to get through it.

Unfortunately, most people in this country do not have an emergency savings. That or they have a very underfunded one.

If you find yourself in the group that does not have a savings, it is time to make a change. Here is what you need to do.

Set A Savings Goal

First, lets sit down and set a savings goal. Begin by calculating what your monthly expenses are.

When calculating your monthly expenses, don’t just include things like rent, insurance and housing. Also be sure to include budgets for food, entertainment, etc.

An emergency savings should ideally have 6 times your monthly expenses in it. That will allow you to ride out just about any financial storm.

So, if your monthly expenses are 3000 dollars, you need to have 18000 dollars in your savings. I know, that sounds like a lot of money and you will not get there overnight. The key is to start saving now and gradually get there over time.

Start with small goals and reward yourself when you get there. If you need 18000 dollars, make your first goal 1000 dollars. Once you reach this goal, reward yourself and then set a new higher one. Eventually, you will get to your big goal and that will be one of your proudest days ever.

Open A Savings Account

Now that you have a goal, you need to open a new savings account.

The easiest thing to do is to open an account with the bank that you currently have checking with. That is a mistake because it makes your savings account too accessible. It would be too easy to borrow out of savings because you could transfer the money instantly.

A better option is to open an online savings account with another bank entirely. You can still transfer money from it to your regular checking but it would take time. It will typically take 24 to 48 hours to get a transfer from an online account. That would make your money accessible in an emergency but not too accessible.

That 24 hour plus time that it takes to make the transfer will give you a cooling off period and prevent impulse purchases.

Another benefit of an online savings is that they pay much more in interest. At around 1.5 percent, it is not a tremendous amount of money, but it is probably 10 times what your local bank is paying. Why leave money on the table?

Contribute To Your Savings

Now comes the hard part, contributing to that savings account.

Your deposits should be automatic and should take place on the day that you get paid. In that way, you never really see the money and you can not miss something that you do not see. Over time, you will forget that you are even contributing to that savings account.

Now, just how much should you contribute? The perfect number is somewhere between 10 to 20 percent of your net income. That probably sounds like a lot to you, but you can work up to it.

If you bring home 2000 dollars a paycheck, you should be saving 200 to 400 dollars. This is hard to do, so start with just 50 dollars a check . Assuming that you get paid every two weeks, that is still 1300 dollars a year plus interest.

Once you get int he habit of savings, keep gradually increasing the money saved by cutting other expenses. Work on your budget and learn how to cut unnecessary spending. If necessary, make big decisions like getting a cheaper car or moving to a cheaper residence.

Saving money is crucial and you must make the hard decisions that will give you financial security.

Reaching Your Goal

One day, at some point, you will reach your financial goal of having an emergency savings account with 6 months of expenses in it. When you do, pat yourself on the back because you have done something that few Americans have done.

When you are done celebrating, you need to keep going. The only difference is that now you will be eyeing retirement. Open a retirement savings or investment account and start diverting money there.

As you can see, saving money is crucial and a lifelong process. The sooner that you accept that and get to it, the more stable and happy you will be.