A savings account is an important part of anyone’s financial stability. A typical independent financial advisor will recommend having one as a safety net. In most cases, it’s better for that purpose than stocks, bonds, or other investments.

However, it isn’t quite as simple as just making an account and putting money into it regularly. There are a few things you need to consider to maximize the benefits of the account.

What To Do

The first bit of advice is to avoid too much saving. That’s as big an issue as saving too little.

First, look at the money you make. Leave behind what you need to pay the bills and utilities. What’s left is the amount you can look to divide into other expenses. Never, ever save money without setting aside the amount needed to pay for things.

When saving, it’s best to start small. Increase the amount you save only if you’re paying off everything that needs to be paid off. Give yourself time to adjust to the new budget.

Keep the savings and checking accounts separate. In fact, you don’t want them being part of the same institution if you can manage it.

You don’t want it easy to transfer funds from one to the other. The convenience makes it easy to move money into savings, but it also makes it easy to get cash out of it. Keep them separate, so the hassle of transferring funds from one to the other discourages withdrawing your savings.

Consider a direct deposit option.

Some employers allow you to arrange for a portion of the paycheck to be deposited directly to the savings account. It’s a good idea to use this.

This takes out the effort of having to do it yourself and makes it automatic. This can be great because it takes the power out of your hands if you’re the forgetful sort. Assuming you only set aside what you can afford, this makes saving much easier.

Finally, give yourself goals to work towards.

It could be something as simple as setting aside 90 days worth of income. From there, you can start saving up for things like vacations, down payments on a home or car, or some expensive gadget you really want.

If you have a lot of savings (enough to, say, cover your income for a year), consider moving some of it over to higher-yield investments. Savings accounts are low-yield but low-risk, so try things like stocks or real estate.