# Do you have a target amount for your savings account? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [January 28, 2009, 1:48pm UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380 "2009-01-28T13:48:11Z")\ **Posts on this page:** 11\ **Page:** 2
**Author:** ![Hypno-Toad](https://avatars.discourse-cdn.com/v4/letter/h/b2d939/32.png) [@Hypno-Toad](https://boards.straightdope.com/u/Hypno-Toad)\ **Post date:** [January 28, 2009, 7:40pm UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/21 "2009-01-28T19:40:01Z")
> [@Duckster](#): > > Better still would be to have CDs in federally insured places with different term lengths. In other words, say you have $17K to save as your rainy day fund. Keep $5K in an ordinary liquid savings account you can access 24/7/365. Of the remaining $12K, invest $1K at the beginning of each month for the next year in one-year CDs. That way at least $1,000 comes available every month if you need it after a year. Otherwise, roll it over into another one-year CD. If you have have more cash available, increase your CD rates to two years, or more. If you really have the cash you might get up to monthly five-year CDs with monthly roll-overs. You will always have cash available and at a decent rate of return. This is what I want to do. I haven’t gotten but the one CD yet, though. ---
**Author:** ![Jayn\_Newell](https://avatars.discourse-cdn.com/v4/letter/j/f9ae1b/32.png) [@Jayn\_Newell](https://boards.straightdope.com/u/Jayn_Newell)\ **Post date:** [January 28, 2009, 7:56pm UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/22 "2009-01-28T19:56:20Z")
We don’t really have a target for our savings account. We do like to keep a grand in our checking account as a cushion, but the savings account we mostly just let be at whatever level it’s at, unless we come into a large sum of money (in which case it sees a nice big deposit). We’ve already drained the account once, but we really did need that new car…the wedding, not so much ---
**Author:** ![StinkyBurrito](https://avatars.discourse-cdn.com/v4/letter/s/b9e5f3/32.png) [@StinkyBurrito](https://boards.straightdope.com/u/StinkyBurrito)\ **Post date:** [January 28, 2009, 7:58pm UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/23 "2009-01-28T19:58:20Z")
> [@Duckster](#): > > Better still would be to have CDs in federally insured places with different term lengths. In other words, say you have $17K to save as your rainy day fund. Keep $5K in an ordinary liquid savings account you can access 24/7/365. Of the remaining $12K, invest $1K at the beginning of each month for the next year in one-year CDs. That way at least $1,000 comes available every month if you need it after a year. Otherwise, roll it over into another one-year CD. If you have have more cash available, increase your CD rates to two years, or more. If you really have the cash you might get up to monthly five-year CDs with monthly roll-overs. You will always have cash available and at a decent rate of return. There is a concept called a “ladder” which sounds like what you are trying to describe, but it is a little different. [This site](http://www.bankrate.com/brm/news/sav/20010521b.asp) describes it pretty well. A short quote from that site: “You go to the bank with $25,000 and buy a $5,000 one-year CD, a $5,000 two-year CD and so on until your last $5,000 buys you a five-year CD. Each year is a rung on the ladder. When the one-year CD matures, you reinvest that money in a five-year CD because by that time your five-year CD has four years left until it matures. As each year’s CD comes due, you roll it into a five-year CD.” A quick thought of concern for those of you who say you have more than a couple of years worth in a savings account. Last time I checked the FDIC only insures these account to $100,000. These limits may have changed recently or be changing soon, however. There are also semi liquid places to invest money that can be useful for access after a 6 month time period but less than 5 years making it unnecessary to store a whole 5 years in a savings account (see the previous paragraph on CD Ladders). ---
**Author:** ![gigi](https://avatars.discourse-cdn.com/v4/letter/g/a587f6/32.png) [@gigi](https://boards.straightdope.com/u/gigi)\ **Post date:** [January 28, 2009, 8:11pm UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/24 "2009-01-28T20:11:43Z")
> [@Dinsdale](#): > > Nope - no target. Just the idea that a portion of my earnings should always go to savings. Same here. About $500 goes to savings and $500 to the retirement account. Sometimes I have to dip into savings (like this month when I have to pay for oil and car insurance) but then it gets replenished wth tax refund or holiday money or any extraordinary income. I need to prepare a budget to see how far it would get me but it’s equivalent to 15 months’ rent (rent is absurdly cheap though, so more like 7 months’ in a “regular” apartment). ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [January 28, 2009, 8:41pm UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/25 "2009-01-28T20:41:36Z")
6 mo to a year of living expenses minimum. Although as a rule I spend less than I take in so my savings should always be increasing. That’s after 401 k. ---
**Author:** ![cletus](https://avatars.discourse-cdn.com/v4/letter/c/f08c70/32.png) [@cletus](https://boards.straightdope.com/u/cletus)\ **Post date:** [January 29, 2009, 2:00am UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/26 "2009-01-29T02:00:06Z")
My personal rule of thumb is to have enough cash in my checking account (earning 1% APR) to buy a new engine and new transmission. Everything more then that goes into one of my taxable or tax deferred/free accounts. I don’t really have a savings account per se, I have various investment accounts. I don’t like locking up my money in a CD and savings accounts have such terrible rates considering all those restrictions they put on you. If I was to liquidate everything tomorrow I would have enough for about 22 years of living expenses. ---
**Author:** ![Cunctator](https://avatars.discourse-cdn.com/v4/letter/c/43a26b/32.png) [@Cunctator](https://boards.straightdope.com/u/Cunctator)\ **Post date:** [January 29, 2009, 2:23am UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/27 "2009-01-29T02:23:16Z")
I keep one account as an “emergency” account. It has roughly two years’ living expenses in it. That’s completely separate from my normal investment accounts and retirement funds. ---
**Author:** ![Duckster](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/duckster/32/1244_2.png) [@Duckster](https://boards.straightdope.com/u/Duckster)\ **Post date:** [January 29, 2009, 6:11am UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/28 "2009-01-29T06:11:16Z")
> [@StinkyBurrito](#): > > A quick thought of concern for those of you who say you have more than a couple of years worth in a savings account. Last time I checked the FDIC only insures these account to $100,000. These limits may have changed recently or be changing soon, however. Nothing stops you from having accounts in different financial institutions, each with their own FDIC limits. > [@](#): > > **How much insurance coverage does the FDIC provide?** > The basic insurance amount is $250,000 per depositor, per insured bank. > > The $250,000 amount applies to all depositors of an insured bank. > > Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank. > > Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than $250,000 at one insured bank and still be fully insured. Source: [Understanding Deposit Insurance | FDIC.gov](http://www.fdic.gov/deposit/Deposits/insured/basics.html) ---
**Author:** ![Aspidistra](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aspidistra/32/3894_2.png) [@Aspidistra](https://boards.straightdope.com/u/Aspidistra)\ **Post date:** [January 29, 2009, 6:27am UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/29 "2009-01-29T06:27:51Z")
We have extra deposits in our mortage account. The money is redrawable within a couple of days at any time, and comes to about two years worth of salary. There is no specific target, but I don’t like to be going backwards at any point. ---
**Author:** ![China\_Guy](https://avatars.discourse-cdn.com/v4/letter/c/779978/32.png) [@China\_Guy](https://boards.straightdope.com/u/China_Guy)\ **Post date:** [January 29, 2009, 7:14am UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/30 "2009-01-29T07:14:24Z")
let’s just say after grad school and getting serious on a career, i stopped living ultra-lean after $100k in savings. safe liquid guaranteed bank savings. i’ve increased it since having kids and a wife. i’ve never gone below this amount even when buying property. I’ve got an mba, spent 7 years in investment banking. yes, i could be retired now if i had leveraged to the max and bet everything on shanghai property in 1999 (instead i bought 1 flat with cash) or bet the ranch on US property 5 years ago. to me, being financially prudent meant more than following the advice of ‘banker friends.’ YMMV: but if you didn’t know this before - bankers, real extate agents, financial advisors almost always advise you to buy buy buy because that’s how they make money. only rarely does their advise match what’s best for you. the romans knew this and coined caveat emptor or buyer beware. ---
**Author:** ![Mudshark](https://avatars.discourse-cdn.com/v4/letter/m/f04885/32.png) [@Mudshark](https://boards.straightdope.com/u/Mudshark)\ **Post date:** [January 29, 2009, 8:33am UTC](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380/31 "2009-01-29T08:33:48Z")
Not me, but I know an olderretired couple with close to 300,000 in savings, not counting investments, and current income (retired from actual jobs, she works in a jewelry store, and he gives seminars on investments). As of right now, I have no savings account. I have a checking account that has about 3 months in it. I really should work on the savings account thing, but I always seem to need the money for something, or decide to pay off a chunk of my car when I have extra money. [Previous page](https://boards.straightdope.com/t/do-you-have-a-target-amount-for-your-savings-account/483380.md?page=1)