This is step two of our five part series on building your financial empire

Once you have your debt under control, next you want to start your saving.

Depending on your household status, you should save anywhere from 3-6 months. If you have a two income household, three months is sufficient. However, if you are the sole income earner of your household you may want six months of expenses saved.

How can I determine how much money is 3-6 months of expenses?

Start by list all your necessary expenses. Expenses that you need in order for your household to operate, such expenses may include:

-Mortgage/rent
-Food
-Transportation
-Phone
-Utilities

Add up the monthly costs that it takes to operate each of these necessities; your total balance is considered your monthly expense. This number should be multiplied by any number between 3 and 6. That will be the amount of cash to save for your emergencies.

Where should I put this money?

A money market account, bank or credit union.

You really don’t want to spend much time chasing what institution has the highest interest rate. This is short term saving so interest rate does not matter at this point.

The best way to save money is to make it automatic. I prefer you to set up an auto draft from your checking account or your paycheck to make monthly, weekly or biweekly contributions to your savings account.

I personally like ING, I have set up bi weekly payments to automatically be deposited from my checking to my savings account.

Savings can enable you to avoid consumer debt. Having a nice cash cushion also makes you sleep better at night.

On Monday we will discuss Insurance!

Have a Happy and Safe Thanksgiving