It’s a simple question, but many people haven’t really thought about it. They blindly throw money into a savings account because they’ve been told that they need to save.
It’s incredibly important to know what your savings is earmarked for, and how close you are to hitting your goal. It’s the only way you can have peace of mind about paying for a vacation, buying a new car, or eventually retiring one day.
Each major savings goal should have its own account, and you should set up automatic transfers into each one. This eliminates the biggest obstacle to saving, which is YOU. Make it automatic, forget about it, and let it pile up!